Keith Gill, also known as the “Roaring Kitty” on Twitter / YouTube “DeepFuckingValue” Reddit is facing a process of collective action proposed for his role in raising short GameStop massive orchestrated r / WallStreetBets of Reddit, Bloomberg reported Wednesday.
According to Bloomberg, the lawsuit was filed by Hagens Berman Sobol Shapiro, a class action company in the securities field, on behalf of Washington State Christian Iovin, which sold $ 200,000 in GameStop stock options when it was worth less than $ 100 per action. This turned out to be a very bad betbecause users on r / WallStreetBet have released a organized effort to pump up GameStop and other underperforming actions, such as AMC and BlackBerry, with a nostalgic value that eventually he was quite successful. As the Wall Street sharks quickly took over clued in and joined The effort led by Reddit, the shares in GameStop rose to $ 483, which is a disaster for traders who sell short of the company’s shares. According to the lawsuit, Iovin was forced to redeem his calls at inflated rates. GameStop now stands at $ 46 per share, still significantly higher in early 2021, when trading in the $ 19 range.
Gill was one of the main supporters of the rush on GameStop on his social media accounts and according to CNBC, posted on Reddit that it earned at least $ 7.8 million on the company’s shares. The lawsuit accuses him of not being a layman, but of a licensed securities broker who deliberately manipulated the company’s stock price to get rich quick.
“Gill’s misleading and manipulative behavior has not only violated many industry regulations and rules, but also various securities laws by undermining the integrity of the GameStop stock market,” the Bloomberg proposal said. “It caused huge losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop shares during the market frenzy at very high prices.”
In accordance with New York Times, the class action lawsuit mentions Gill’s multiple broker licenses and also names MassMutual’s brokerage arm – where Gill worked until a few weeks ago and which the plaintiffs claim failed to properly control in its market activities. The Times also noted that Massachusetts regulators are considering whether his posts could violate industry law or regulations. (The Securities and Exchange Commission has made vague threats to all those involved in the speculative frenzy, including the stock trading app Robinhood, but did not actually realize them.)
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Gill is struggling with claims that he has tried to manipulate the market to his advantage. The short tightening was only possible because hedge funds such as Melvin Capital took wide short positions on GameStop, giving investors the opportunity to make big money if the stock rose while hedge funds lost their shirts. The House Financial Services Committee is holding a hearing Thursday on the whole r / WallStreetBets fiasco, with Gill scheduled to testify. Others scheduled to speak it includes Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, and Melvin Capital CEO Gabriel Plotkin.
In his prepared remarks at home, Gill claimed that his position as director of financial education for health at MassMutual had been completely unrelated to his second concert as a stock market commentator and that he truly believed that GameStop had “the potential to reinvent itself as a destination. final for players in the thriving $ 200 billion gaming industry. Gill added that just a few months ago, in December 2020, his YouTube and Twitter accounts each had a few hundred followers each, and he did not believe he had the ability to influence markets.
“The idea that we used social media to promote GameStop shares to involuntary investors is absurd,” Gill wrote. “I was very clear that my channel was for educational purposes only and that my aggressive style of investing is unlikely to be suitable for most people who check the channel. The fact that other individual investors bought the shares was irrelevant to my thesis – my focus was on the fundamentals of the business. ”
Gill added that “others will have to explain” exactly what happened to GameStop.
“Here’s the thing: I’ve had little experience and I barely understand these issues,” he wrote. “It’s alarming how little we know about the inner workings of the market, and I’m grateful that this committee is examining what happened.”
Gill’s lawyer, William Taylor, declined to comment to the Times, while MassMutual told the newspaper it was looking into the matter.