Roaring Kitty Faces New Securities Fraud in GME Case

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As a seasoned crypto investor with a keen eye for market trends and a deep understanding of the regulatory landscape, I find the latest developments surrounding Keith Gill’s alleged involvement in a “pump and dump” scheme for GameStop stocks quite intriguing.

Keith Gill, known for his impact on the 2021 GameStop short-squeeze, is under securities fraud scrutiny due to a newly filed class-action lawsuit. The complaint, submitted on June 28 in the Eastern District of New York, asserts that Gill manipulated stock prices via social media messages concerning GameStop (GME) between May and June, resulting in considerable market instability.

According to a lawsuit spearheaded by plaintiff Martin Radev, and backed by the Pomerantz law firm, it is alleged that Gill failed to provide adequate disclosure regarding his trades involving GameStop call options.

In mid-May, Radev purchased 25 shares of GME and three call options. He now claims that he incurred losses as a result of Gill’s alleged actions.

I, Gill, had kept a low profile on social media for the past two years. However, on May 13, I made cryptic posts about a specific stock, X, on my account. This sudden activity ignited a surge of interest and speculation among my followers, leading to an astounding 180% increase in the stock price of GameStop within just one day, escalating from $17.46 to $48.75.

— Roaring Kitty (@TheRoaringKitty) May 13, 2024

I made an unexpected announcement on Reddit on June 2nd, revealing my significant investment in GameStop (GME). With a position consisting of 5 million shares and 120,000 call options expiring on June 21, 2024, the market responded positively. The price of GME closed above $45 that day due to this disclosure.

According to former federal prosecutor Eric Rosen, it’s unlikely that the lawsuit will succeed based on his analysis. In a blog post published on June 30th, Rosen argued that no prudent investor would have waited until the exact expiration dates for Gill to exercise his options.

Furthermore, Rosen contends that making investment choices exclusively based on mysterious social media updates from an individual referred to as “Roaring Kitty” is unwarranted. Rosen underscores the necessity of providing concrete proof of deliberate misrepresentation for establishing fraud allegations, which he believes is absent in this scenario.

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2024-07-01 10:12