‘Roaring Kitty’ Keith Patrick Gill Accused in Gamestop Pump-and-Dump Scheme Class Action Lawsuit: ‘Has Suffered Significant Losses and Damages’ – GameStop (NYSE:GME)

Keith Patrick Gillcommonly known on social media as “Roaring Kitty,” is facing a new class action lawsuit alleging a pump-and-dump scheme involving GameStop Corp. GME securities.

What happened: A court document filed on June 28 in the Eastern District of New York shows that the plaintiff Martin Radev accuses Gill of manipulating GameStop’s stock price through his social media influence. Gill is a former financial analyst known for his significant role in the “meme stock” movement.

The lawsuit alleges that Gill discreetly purchased a large number of call options for GameStop before making a social media post on May 12, 2024, that sparked renewed interest in the company’s stock. The stock price rose over 74% the following day. Gill then allegedly disclosed his large stake in the company on June 2, causing the stock price to rise further.

On June 3, the Wall Street Journal reported that Gill had purchased a large amount of GameStop options shortly before his May 12 post. This news caused GameStop’s stock price to drop 5.36%, according to the report.

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On June 13, Gill posted a screenshot of his GameStop portfolio showing that he no longer holds the call options but has increased his position in GameStop stock. The lawsuit alleges that Gill profited from these transactions and describes his actions as a pump-and-dump scheme.

The lawsuit seeks to recover damages arising from Gill’s alleged violations of federal securities laws.

“As a result of Defendant’s unlawful acts and omissions and the rapid decline in the market value of the Company’s securities, Plaintiff and other class members have suffered significant losses and damages,” the lawsuit states.

Why it is important: Roaring Kitty’s influence among Redditors, particularly r/WallStreetBets users, is considerable. Interestingly, the recent lawsuit was peppered with memes Gill posted on social media. The filing noted that a May 12 post received nearly 28.5 million views, 12,000 comments, and 135,000 reactions.