a class action lawsuit in the GameStop (GME) stock case

Roaring Kitty, the man behind the “meme stock mania,” is now accused in a class action lawsuit of financial fraud in connection with GameStop (GME) shares. The prosecution sees him as the creator of a “pump and dump” scheme and of deceiving his followers on social media.

Roaring Kitty and the class action lawsuit regarding the “Pump & Dump” system with GameStop shares (GME)

Screaming kitten, whose real name is Keith Gill, was sued in a new class action lawsuit on the case of GameStop (GME) shares.

The indictment was filed on June 28 in the U.S. District Court for the Eastern District of New York.

In practice, Gill will have to face Charged with financial fraudand to have orchestrated a pump-and-dump scheme with a series of social media posts starting on May 13.

In particular, Gill would be guilty deceived his followers, by inadequately disclosing the purchase and sale of his options on GameStop.

The Pomerantz law firm, which represents plaintiff Martin Radev, said it was harmed by the alleged “pump and dump” after purchasing 25 GameStop shares and three call options starting in mid-May.

But there are such as Attorney Eric Rosenwho argue that the class action lawsuit against Roaring Kitty is doomed to failure:

“@TheRoaringKitty was sued for financial fraud on Friday night based on (ridiculous) allegations that he failed to disclose his intention to sell his call options to his Twitter and Reddit followers. Read our analysis below: We think the lawsuit is unlikely to succeed. https://dynamisllp.com/knowledge/roaring-kitty-sued-for-securities-fraud”

Roaring Kitty and his return to Twitter: the immediate impact on GameStop shares (GME)

It was mid-May when Roaring kitten returned with a tweet on X, after three years of absolute silence.

And indeed, the market has started to shake again, leading to a rise in the shares of GameStop (GME) by +74.4%, after already seeing an increase of 110%.

But his post on X contained no written words, only An image of a player leaning forward while sitting on the chair. Some interpreted this tweet as a player taking the game seriously.

In just 13 hours, Roaring Kitty’s tweet had already received 63,000 likes, confirming that the social network’s audience was giving him the attention he had requested in other posts.

Keith Gill is a former Massachusetts Mutual Life Insurance marketer who attracted an army of day traders between 2020 and 2021 and influenced them to also invest in GameStop’s call options.

The constant market madness

As early as the beginning of June, Roaring Kitty seemed to have influenced investors’ decisions and caused scenarios of pure madness on the traditional market.

Indeed, GME stock rose 47% in a single trading day, at which point the total cumulative gain since the end of May was over 100%.

First of all, there was a first jump after the news about Roaring Kitty, which led to the The price of GME shares rose from $23 to $40, only to fall back below $26 the next day.

And then again, on another day of the same week, GME crossed $30 and then $46. At the time of writing, GME stock is worth $24.5.