Reddit’s lead GameStop hypebeast is being sued for his role in the stock surge
“Roaring Kitty,” also known as u/DeepFuckingValue on Reddit and Keith Patrick Gill in real life, is now the target of a lawsuit (which you can view below) that claims he manipulated the market to increase GameStop’s stock price.
The lawsuit claims that he created a “fake persona” of an investment newbie, while actually having several financial certifications and working for an insurance company. That company, Massachusetts Mutual Life Insurance Company, is also named as a defendant, with the case saying that it should’ve prevented Gill from talking about the stock.
Gill is well known on the WallStreetBets subreddit, where he’s been posting for a year about GameStop’s stock, its value, and how much he has invested. He would also post hourslong videos on YouTube discussing the stock and why he thought it was undervalued. The videos are absolutely packed with financial jargon and discussion about GameStop’s business model and position in the market. He was even profiled by The Wall Street Journal as the stock began to soar, which reported that he was set to make tens of millions of dollars from his investment.
But the legal complaint claims that Gill’s 10 years in the finance and investment industries, along with the financial licenses and qualifications he has, don’t square with the “amateur, everyday fellow” persona he put out on his YouTube channel, Reddit account, and Twitter — and that he used that persona to illegally manipulate the market by posting about it to his “legion of fans.”
However, that “legion” consisted of around 529 subscribers on YouTube, and 550 followers on Twitter, as of December 25th, 2020, according to Gill’s written testimony for the House Financial Services Committee, which was also released today. In it, he claims that he was very clear that his advice wasn’t meant for most investors, and that he posted his analysis to social media to both share it and receive critiques on it.
Lawyers argue that his financial certifications also made it illegal for him to share claims about stocks that he knows are “false or misleading,” which the plaintiff claims he did.
The complaint also tries to paint Gill as something of a mastermind, claiming he personally “incited a market frenzy” on Reddit and “actively recruited traders” on YouTube and Twitter as part of a plan to profit while damaging others’ finances in the process. The plaintiff claims they lost money in the case after the stock’s value shot up, allegedly due to Gill’s manipulation.
Even the plain clothing he wore in videos was part of Gill’s scheme to defraud, lawyers suggest.
Gill is slated to speak at a congressional hearing about GameStop trading on February 18th, along with the CEOs of Reddit and Robinhood. The hearing aims to determine if there was market manipulation involved in the rapid rise and fall of the GME stock. In his statements, which were released before the hearing, Gill claims that he “did not belong to any groups trying to create movements in the stock price.”
The plaintiff in the case hopes to turn it into a class action suit, and the law firm behind it, Hagens Berman, has set up a page for investors to send in their complaints. The firm has had success with class actions in the past; it’s won notable settlements from Apple, Visa-Mastercard, and Volkswagen.