Keith Gill, one of the most influential voices that pushed GameStop on the WallStreetBets Reddit forum, was hit with a lawsuit that accused him of misrepresenting himself as an amateur investor and profiting by artificially inflating the price of the stock.
The proposed class action against Gill, who adopted the YouTube nickname “Roaring Kitty,” was filed Tuesday in federal court in Massachusetts.
The suit said Gill was actually a licensed securities professional who manipulated the market to profit himself. Gill touted GameStop shares through an extensive social media presence on Youtube, Twitter and Reddit, where he used a more profane alias.
“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 suit said.
“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,” it stated.
The suit was filed by the securities class action firm Hagens Berman Sobol Shapiro on behalf of Christian Iovin of Washington state and similarly situated individuals. Iovin sold $200,000 worth of call options on GameStop shares when the stock was below $100.
The stock quickly eclipsed $400 a share, forcing him to buy the calls back at elevated prices.
Gill became one of the public faces of the GameStop rally that has been a Wall Street obsession this year. The stock’s stratospheric rise appeared to pit scrappy individual investors against sophisticated hedge funds who were heavily shorting the troubled mall retailer.
Some funds lost billions of dollars covering their positions as GameStop shares surged more than 1,700% during one stretch in January.
The GameStop rally has also attracted the attention of politicians, and Gill is scheduled to testify Thursday before the House Financial Services Committee, along with executives from Robinhood Markets, Citadel LLC, Melvin Capital Management and Reddit.
In prepared testimony for his Congressional appearance, provided in advance by his lawyer in response to questions about the lawsuit, Gill said his previous work in the financial industry never included trading securities or advising clients.