Keith Gill, a Massachusetts financial educator, turned the basement into YouTuber, who became a popular Reddit hero for his first investment in GameStop before a massive lawsuit and subsequent drop in the company’s shares were sued with a lawsuit. · Lectiva.
The lawsuit, filed in Massachusetts federal court, alleges that Gill “adopted the fake person of an everyday amateur, who was simply looking for the boy” in order to recruit investors in the short term, thus constituting a securities fraud.
Gill, who has more than 400,000 subscribers to his YouTube account, Roaring Kitty, acted as a stockbroker for Massachusetts Mutual, according to the lawsuit.
When a user named DeepFuckingValue posted his first post on the Reddit r / WallStreetBets forum in September 2019, he didn’t make too many waves on a message board where retailers often shared their strange bets and stock losses. “Holy Brother, what made you download 53K at Gamestop?” commented a user.
At the time, the shares in the video game store were trading at about $ 5 per share. However, Gill, later posting anonymously to the account, continued to share his updates; and Reddit’s retail investors, along with some hedge funds, soon jumped on the bandwagon. In January, GME’s shares of dollars were trading at just under $ 500 per share, with Gill’s initial investment reaching a payout of up to $ 48 million, according to demand.
A post Gill wrote on January 27 about his maximum pay, “is full of [WallStreetBets] users explain how Gill encouraged them not only to buy GameStop shares, but also inspired them to keep their shares to manipulate the market and ensure a loss for those who held short positions, ”the lawsuit says.
The main plaintiff in the lawsuit, a Washington state man named Christian Iovin, “used approximately $ 200,000 in collateral to sell GameStop stock option contracts when the shares were below $ 100.” says the demand. Yovin and his lawyer, Reed Kathrein, declined to comment on the article.
On his YouTube channel, where he offers “live educational playbacks where I share my daily stock-tracking and investment research routine,” Gill repeatedly directed viewers toward a small potential compression of GameStop shares. , where investors buy stocks against which it bets heavily. Of Gill’s 80 channel videos, 56 refer to GameStop, the lawsuit says.
The lawsuit also names MassMutual, Gill’s former employer, as the defendant, alleging that the insurance company had “legal and regulatory obligations to supervise Gill to prevent that same conduct.”
In accordance with He Wall Street Journal, Gill resigned from his job at MassMutual on January 28, the day after his maximum pay, and the day before his first public interview, also with the magazine, was published.
Gill’s actions have also caught the attention of state and federal officials. William Galvin, secretary of the Massachusetts Commonwealth, issued a subpoena against Gill earlier this month, with the aim of investigating whether his day job affected his business, according to The New York Times.
MassMutual told Time that he did not know of Gill’s business until he resigned on January 21 and would have asked him to stop, if they knew. MassMutual did not immediately respond to a request for comment on this article.
Gill is due to testify Thursday, along with Reddit and Robinhood CEOs, at a congressional hearing on the rise in securities organized by Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee.
In prepared statements released Wednesday before his testimony in Congress, Gill denied any wrongdoing.
“The idea that I used social media to promote GameStop shares to involuntary investors is absurd,” Gill’s remarks read. “I was very clear that my channel was for educational purposes only and that my aggressive investment style was unlikely to be suitable for most people who consulted the channel.”
GameStop investors also filed a class action lawsuit against the Robinhood trading app last month after restricting transactions to GameStop and other popular stock ar / WallStreetBets, sending Redditors and app users to a merger.
You can read the lawsuit here.