By Jonathan Stempel
NEW YORK (Reuters) – Keith Gill, the investor known as “Roaring Kitty” who helped fuel the meme stock mania of 2021, has been sued by GameStop investors who said they lost money because of his “pump and -dump” plan for the video game retailer.
A proposed class action accusing Gill of securities fraud was filed Friday in federal court in Brooklyn, New York.
Investors led by Martin Radev, who lives in the Las Vegas area, say Gill manipulated GameStop securities between May 13 and June 13 by quietly accumulating large amounts of shares and call options, then dumping some holdings after he had emerged from a three-year social media crisis. pause.
They said Gill’s activities caused GameStop’s stock price to fluctuate wildly, generating “millions of dollars” in profits at their expense.
“Defendant continues to enjoy celebrity status and has millions of followers through his social media accounts,” the complaint said. “Accordingly, Defendant was well aware of his ability to manipulate the market for GameStop securities, as well as the benefits he could reap from doing so.”
Gill did not immediately respond to requests for comment Monday.
On May 12, he posted a cryptic meme on the social media platform
GameStop’s stock price tripled in the next two days, but by May 24, the gains were almost completely restored.
On June 2, Gill revealed that he owned 5 million GameStop shares and 120,000 call options, and on June 13, he revealed that he had lost the call options but owned 9 million GameStop shares.
Investors said the truth about Gill’s investments came out on June 3 when the Wall Street Journal reported on the timing of his options trades and said online broker E*Trade was considering kicking him off its platform.
The meme stock mania was fueled in part by investors staying home during the pandemic, leading to a “short squeeze” that caused losses for hedge funds that bet stock prices would fall.
Trading in Chewy shares was in turmoil on Monday after Gill announced he owns a 6.6% stake in the pet products retailer.
The case is Radev v. Gill, US District Court, Eastern District of New York, No. 24-04608.
(Reporting by Jonathan Stempel in New York; Editing by David Holmes)
