One of the most prominent figures on the WallStreetBets subreddit that sent GameStop stock skyrocketing has been slapped with a lawsuit. The suit alleges Keith Gill (aka Roaring Kitty) is a licensed securities professional instead of an amateur investor and it claims he profited from the GameStop short squeeze by manipulating the market.
“Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares,” the proposed class action suit says. “He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”
GameStop stock rose by over 1,700 percent during one rally in January as small investors pushed it to a record high of $483. That share price has dropped back down to around $45. While many amateur traders raked in hundreds or thousands of dollars from the GameStop stock, some hedge funds lost billions as they scrambled to cover their bets against the company.
According to the filing, Gill "actively worked as a professional in the investment and financial industries" for many years. It claims that he holds a number of securities licenses and qualifications, including a Charted Financial Analyst license. The suit also states that Gill, who is set to testify before the House Financial Services Committee on Thursday, was previously employed by Massachusetts Mutual Life Insurance Company (MassMutual) as a "Financial Wellness Director."
MassMutual and a subsidiary have been named as defendants in the case. The suit claims they were obligated to supervise Gill's market conduct. Engadget has contacted Gill and MassMutual for comment.
As Bloomberg notes, plaintiff Christian Iovin sold $200,000 worth of GameStop call options while the stock was below $100. The share price quickly more than quadrupled and he had to buy back the calls at a far higher cost.