A lawsuit filed against Keith Gill, the internet personality known as “Roaring Kitty,” by GameStop investor Martin Radev has been abruptly dropped after only three days. The lawsuit, filed in the Eastern District Court of New York on June 28th, alleged securities fraud related to Gill’s social media activity and trading of GameStop stock.
Radev’s accusations centered on Gill’s influence on social media, claiming he orchestrated a “pump and dump” scheme by artificially inflating GameStop’s share price through tweets and failing to disclose plans to sell call options before expiration. However, the suit was withdrawn “without prejudice” on July 1st, meaning Radev could potentially refile in the future.
Legal experts like Eric Rosen, a former federal prosecutor, believe the lawsuit had weak points. Rosen argued that proving Gill’s fraudulent intent and Radev’s status as a “reasonable investor” would be difficult. As Rosen stated, “purchasing securities based solely on social media posts is unreasonable.”
This lawsuit stems from Gill’s surprising return to social media in May 2024. His cryptic online activity, along with subsequent Reddit posts revealing significant GameStop call options, sent the stock price into a frenzy. Gill exercised these options before expiry and used the profits to further bolster his GameStop holdings.
Gill’s recent acquisition of a significant stake (6.6%) in pet retailer Chewy has sparked speculation. Some believe he might be planning a similar strategy to the GameStop short squeeze, while others suggest the mere hype surrounding his purchase will inflate the stock price.
While the lawsuit’s withdrawal leaves questions unanswered, it highlights the complexities of social media’s role in the stock market and the challenges in proving manipulation in such a volatile environment.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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