‘Roaring Kitty’ faces class-action lawsuit over alleged GameStop stock manipulation

As a seasoned crypto investor with a background in securities law, I’ve followed the developments surrounding the Roaring Kitty (Keith Gill) case closely. While the allegations are serious, I believe the lawsuit lacks merit for several reasons.

Keith Gill, commonly referred to as “Roaring Kitty” on social media platform X, is under scrutiny for his role in a controversial stock manipulation case concerning GameStop. A class-action lawsuit has been filed against him, alleging that his social media communications played a significant part in an alleged pump-and-dump scheme.

A legal complaint, submitted on June 28 in the Eastern District Court of New York, alleges that Gill deceitfully influenced GameStop’s share value between May and June, leveraging his significant social media clout.

The criticism alleges that Gill secretly bought a substantial amount of GameStop call options before his May 12 social media message, signaling his comeback after an absence of three years, and thereby manipulating the market in a pump-and-dump scheme.

The post fueled a significant surge in GameStop’s stock price, with many interpreting it as a sign of the author’s renewed enthusiasm for the company.

As a crypto investor, I’ve noticed an intriguing trend in the Solana ecosystem recently. Following Gill’s return to social media, memecoins built on this blockchain experienced a significant surge. Among them, Roaring Kitty (KITTY), piqued my interest with its impressive 8,000% price increase within just one day.

As a researcher investigating recent events on Reddit, I came across an intriguing disclosure made by a user named Gill on June 2. He revealed that he held a significant investment in GameStop, consisting of 5 million shares and 120,000 call options with a expiration date set for June 21.

Based on the filed complaint, the article caused GameStop’s share prices to surge by over 70% during pre-market trading the following day.

As an analyst, I’ve come across a concern raised in a complaint that mentions a Wall Street Journal report. According to this report, it is alleged that I bought a significant quantity of GameStop options prior to my May post. This revelation has sparked apprehensions regarding potential market manipulation.

As a researcher studying market trends, I uncovered an intriguing revelation: Gill disclosed having exercised every one of his call options totaling 120,000, significantly increasing his GameStop shareholdings to over 9 million. Yet, in the subsequent three trading sessions, GameStop’s stock value saw a downturn, decreasing by 15.18%.

The lawsuit claims that Gill concealed his plan to cash out on his options calls beforehand, deceiving his audience and potentially manipulating the market. This covert action reportedly resulted in financial losses for investors.

According to the representation of plaintiff Martin Radev by law firm Pomerantz, they claimed that Martin suffered financial losses due to a suspected “pump and dump” scheme. This alleged event transpired after Martin purchased 25 shares of GameStop and three call options during mid-May.

As an analyst, I would rephrase it as follows: According to the plaintiff and other class members, I, Gill, allegedly manipulated the market through my social media influence, which they claim is a violation of federal securities laws. The objective of the complaint is to obtain compensation for the resulting losses.

Eric Rosen, a former federal prosecutor and co-founder of Dynamis LLP, expresses doubt over the success of the recent lawsuits against him, forecasting their potential failure.

Rosen identified three shortcomings in this case, which are likely to be dismissed.

Based on what he said, it wasn’t unexpected that Gill would ultimately dispose of his options due to their expiration dates.

Furthermore, Gill’s tweets did not offer investment tips. As per Rosen’s perspective, prudent investors wouldn’t base their decisions solely on those tweets.

As a crypto investor myself, I didn’t have the obligation to reveal my trading plans since I’m not acting as a financial advisor.

As a financial analyst, I’ve observed that only financial advisors and fiduciaries have an obligation to reveal their holdings or plans. However, Roaring Kitty falls outside of these categories.

“He added that this issue will present a significant challenge for the plaintiffs to overcome.”

A man named Martin Radev is filing a lawsuit against Roaring Kitty, also known as Keith Gill, for alleged securities fraud related to his promotion of GameStop ($GME) stocks. I personally own 35 shares and some options in the company, but I’m skeptical about the case’s chances in court and its potential impact on Keith Gill.

— amit (@amitisinvesting) July 1, 2024

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2024-07-01 15:36