Key Points:
Keith Gill, also known as “Roaring Kitty,” had a lawsuit against him dismissed after only three days.
He was accused of participating in a “pump and dump” scheme to inflate the price of GameStop stock.
Legal experts are skeptical about the viability of the fraud claims in proving securities fraud.
Keith Gill GameStop
LUCKNOW (CoinChapter.com) — The recent lawsuit against Keith Gill, also known as “Roaring Kitty,” has been quickly thrown out. The lawsuit alleged that Gill was involved in securities fraud in connection to the GameStop stock frenzy. However, the plaintiff dropped the lawsuit just three days after filing it in the United States District Court for the Eastern District of New York. The lawsuit’s speedy dismissal “without prejudice” means that the plaintiff still has the option to file a similar lawsuit in the future.
You Might Also Like:
Is Keith Gill, the GameStop Stock Trader, Banned By ETrade?
Plaintiff dropped lawsuit against Keith Gill. Source: CourtListener
Accusations of GameStop “Pump and Dump” Scheme
The short-lived lawsuit, filed on June 28, claimed that Gill orchestrated a “pump and dump” scheme. The plaintiff, Martin Radev, alleged that Gill used his social media influence to artificially inflate GameStop’s stock price for his own gain. Radev claimed that Gill’s actions resulted in significant losses for other investors.
A key accusation was that Gill did not disclose his intention to sell approximately 120,000 call options before their June 21 expiration date. Radev argued that this lack of transparency constituted securities fraud.
Legal Experts Give Their Opinion
Eric Rosen, a former federal prosecutor and founding partner at Dynamis law firm, shared his thoughts on the case. In a blog post on June 30, Rosen suggested that Gill could easily counter the main arguments of the lawsuit with a well-crafted motion to dismiss. He pointed out the challenges Radev would face in proving fraud and establishing himself as a “reasonable investor” in court.
Gill, who was at the center of the 2021 GameStop short squeeze, recently ended a two-year absence from social media. His return in May, marked by cryptic memes on X (formerly Twitter), coincided with renewed volatility in GameStop’s stock price.
GameStop share price rose when Gill posted a cryptic meme in May this year. Source: Google Finance
Following his return, Gill disclosed substantial GameStop holdings on Reddit, including 120,000 call options set to expire on June 21. He exercised these options before they expired, using the profits to add four million shares to his portfolio.
Gill Expands to Chewy
In his latest market move, Gill has acquired a significant stake in Chewy, a major U.S. pet retailer. He purchased nine million shares, representing a 6.6% ownership stake in the company. His followers are now speculating about potential future market movements, with some observers drawing parallels to the GameStop situation.
However, Chewy’s share price is currently down nearly 7% from a day ago and is trading at $25.44.
Source: Google Finance
