Roaring Kitty faces fraud charges in class-action lawsuit over GameStop trading activity

Keith Gill (Roaring Kitty), a stock trader known for the GameStop short squeeze in 2021, is facing securities fraud charges in a class action lawsuit over a series of social media posts that caused GameStop (GME) stock prices to fluctuate wildly between May and June. However, a former federal prosecutor believes the lawsuit is likely doomed to fail. The lawsuit was filed in the Eastern District of New York on June 28, alleging that Gill orchestrated a "pump and dump" scheme through social media since May 13, failed to fully disclose his GameStop options trading, misled followers and caused investors to lose money. Plaintiff Martin Radev said he suffered losses from the "pump and dump" behavior. Gill posted on May 13 after ending a two-year social media hiatus, causing the stock price to soar. On June 2, he disclosed a large position on Reddit, pushing up the stock price again, and revealed that he had exercised all call options to realize millions of dollars in gains. The complaint alleges that Gill failed to disclose his intention to sell options in advance, misled the market and caused investors to lose money. But Eric Rosen, a former federal prosecutor and founding partner of the law firm Dynamis LLP, believes that the lawsuit was doomed to fail from the start because the allegation that Gill should disclose the intention to sell options does not stand up in court, and the plaintiff is only trying to profit from the impact of Gill's posts on prices, not the content of the posts. Rosen said that proving fraud requires proving that the fraudster has lied outright or deliberately concealed important information, and Gill's social media posts are not statements containing information that can be proven or refuted. (Cointelegraph)