Keith Gill — the meme-sharing influencer known as “Roaring Kitty” and “DeepF-Value” who has raised millions on X and Reddit behind GameStop — briefly faced a lawsuit alleging he knowingly misled his followers. his faithful to reap millions of dollars in profits. The lawsuit was voluntarily dismissed by plaintiff Martin Radev on July 1.
The proposed class action was filed Friday by Radev, a GameStop investor who accused Gill of a “pump-and-dump scheme” that allegedly artificially inflated GameStop’s stock prices between May 13 and June 13. . As a result, possibly thousands of investors were harmed, including Gill’s followers, Radev’s complaint alleges, while speculating about the size of the class. On Monday, Radev asked the court to dismiss the lawsuit without prejudice.
Radev’s complaint followed reports that E-Trade was considering banning Gill for alleged stock manipulation but reportedly feared a backlash from Gill’s so-called stock army. According to the aggrieved investor, Gill’s scheme allegedly worked like this:
“Unbeknownst to the investors,” Gill “quietly purchased a large volume of GameStop call options on E-Trade at relatively low prices.” He later “revived the meme-stock movement” he first sparked in 2021 by posting a meme on May 12 showing a costumed player suddenly sitting in his chair. That and the subsequent meme posting — as well as the sharing of allegedly fraudulent knowledge in his GameStop portfolio — triggered two spikes in trading that boosted the value of GameStop’s securities. Then, on June 13, Gill “quietly sold” or “dumped” all of his “120,000 GameStop call options for a huge profit” and only then informed investors and his “millions of followers” of a raise of “his stake in GameStop Stock of over 4 million shares.”
Radev said Gill should have made his shares known a month ago to investors, who allegedly “suffered significant losses and damages” due to artificially inflated prices.
Because Gill is “an American financial analyst and investor, as well as a former financial analyst for Massachusetts Mutual Life Insurance Company,” Radev alleged that Gill “also had actual knowledge of the misleading nature of the information he was disseminating and/or circulating.” . Otherwise, he allegedly “acted in reckless disregard of true information known at the time” when his online postings were driving GameStop’s stock up as much as 179 percent.
Radev claimed Gill was using his X account “as a ruse to deceive and defraud investors”. Because Gill failed to disclose his large purchase of call options before his meme storm, Gill allegedly hid “what would have been his apparent purpose in raising GameStop’s stock prices for profit his,” claimed Radev. That information would dissuade savvy investors from buying call options during Gill’s alleged scheme, Radev claimed.
Seeking to disgorge Gill from any ill-gotten gains, Radev asked a jury to agree that Gill “circulated and disseminated materially false and misleading information” with the “purpose of inducing” Radev and others to purchase securities of GameStop. He is also seeking damages for all GameStop investors who bought securities at allegedly illegally inflated prices during the month of Gill’s meme posting. But the suit has since been closed, before any other plaintiffs in the proposed class could join.
Neither Gill nor Radev’s legal team immediately responded to Ars’ request for comment.
This story was updated to reflect the voluntary dismissal of the lawsuit.