Reddit trader ‘Roaring Kitty’ behind GameStop saga is SUED for securities fraud02/17/2021
THE Reddit trader behind the GameStop saga has been sued for securities fraud.
The social media persona "Roaring Kitty" at the center of last month’s frenzied rally in shares violated securities laws and caused "huge losses" for investors, according to a class action lawsuit filed in federal court in Massachusetts.
Keith Gill, or Roaring Kitty on YouTube and DeepF***ingValue on Reddit forums, allegedly hid his sophisticated financial training and duped retail traders into buying inflated stocks, according to the complaint filed on Tuesday.
The lawsuit comes before Gill is scheduled to testify on Thursday in Congress about the so-called "Reddit rally."
According to the lawsuit, Gill “incited” the rally, which was hailed as a victory of the little guys against Wall Street hedge funds that bet against GameStop and other struggling businesses.
"The idea that I used social media to promote GameStop stock to unwitting investors is preposterous," said Gill’s testimony to Congress, which was published on Wednesday.
"I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel."
The lawsuit by Christian Iovin, a Washington state resident who purchased GameStop stock options, also names as defendants Massachusetts Mutual Life Insurance Co and its subsidiary MML Investors Services LLC, which employed Gill until Jan. 28.
MassMutual was obligated to supervise his activities as a registered broker, according to the lawsuit.
MassMutual did not immediately respond to Reuters' request for comment.
The company told Massachusetts regulators it was unaware of Gill’s outside activities.
Gill allegedly purchased GameStop stock for $5 and then used social media to drive shares from around $20 in early January to more than $400 in just two weeks, violating securities laws against manipulating the market, according to the lawsuit.
The stock was trading around $46 on Wednesday.
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