Keith Gill, who adopted the online nickname “Roaring Kitty,” is the subject of a lawsuit regarding the recent GameStop (GME) – Get Report stock frenzy, which saw Wall Street rocked by an army of retail investors.
The lawsuit, which was filed Tuesday in U.S. District Court in Massachusetts, alleges that Gill misrepresented himself as an amateur investor and profited by artificially inflating the price of the stock of the Grapevine, Texas, videogame retailer.
“In order to motivate amateur traders, Gill fashioned himself as a kind of Robin Hood and characterized securities professionals as villains,” the lawsuit said. “Gill, however, is no amateur. For many years, he actively worked as a professional in the investment and financial industries.”
Gill, the lawsuit said, “caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”
Gill worked in marketing for Massachusetts Mutual Life Insurance Co., which is also named in the lawsuit. The company did not immediately respond to a request for comment.
The plaintiff in the action, which requests class-action status representing investors in the case, is Christian Iovin of Washington state.
Iovin, the suit says, sold $200,000 of call options on GameStop shares when the stock was below $100, Bloomberg reported. The stock quickly eclipsed $400 a share, forcing him to buy back the calls at elevated prices, the lawsuit alleges.
GameStop was one of a handful of companies whose shares began to soar in late January, driven by an army of retail investors active on the online forum WallStreetBets, hosted by Reddit.
“[They] need a scapegoat.” one poster said on WallStreetBets.
“I’m sure they would be fine with it if he charged an exorbitant subscription fee,” another said.
Some investors openly called on others to bid up the shares of certain names. The aim was to trigger losses for hedge funds that had sold the stocks short, or bet that the stocks’ prices would fall.
The Wall Street Journal reported that Gill, 34, began posting his investment activity in GameStop to the WallStreetBets subreddit in June 2019.
Reddit users went to investing apps like Robinhood to buy shares of GameStop. On Jan. 28, Robinhood temporarily blocked users from buying shares of GameStop and several other companies.
Gill is scheduled to appear before Congress on Thursday for a hearing, according to the House Financial Services Committee’s witness list.
He issued a statement ahead of the hearing where maintained that he did not “solicit anyone to buy or sell the stock for my own profit.”
“I did not belong to any groups trying to create movements in the stock price,” the statement continued. “I never had a financial relationship with any hedge fund. I had no information about GameStop except what was public. I did not know any people inside the company, and I never spoke to any insider.”
Gill, who grew up in Brockton, Mass., said that while at MassMutual he helped develop financial education classes that advisors could present to prospective clients and never sold securities.
Executives from the hedge fund Citadel and Reddit are also slated to appear before the committee, as is Vlad Tenev, Robinhood Markets co-founder and chief executive.
GameStop shares, which skyrocketed in January, were down 7.8% to $45.65. On Jan. 28 the stock traded as high as $483.