Keith Gill, or “RoaringKitty” — the guy behind the GameStop frenzy (NASDAQ: GME) is facing a lawsuit from the securities for his role in the GME saga. Gill’s GME stock value surged to $48 million after Redditers led an investing rally in the popular WallStreetBets Reddit group.
The 34-year old YouTuber invested in GameStop stock back in 2019 when GME was trading at $4 per share. However, after he contributed to the January GME short squeeze; Gill accumulated a wealth of over $48 million. GameStop’s stock price blasted above $486 per share in January.
In a lawsuit filed in Massachusetts on Tuesday; Gill was alleged of misrepresenting himself as an amateur investor although he was a licensed securities professional. He was accused of taking advantage of Reddit amateur traders to profit from the GameStop frenzy.
According to Bloomberg; the lawsuit said: “Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GME shares,” It continued: “He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GME stock during the market frenzy at greatly inflated prices.”
GameStop traders lost millions
The GameStop frenzy was disrupted by a severe correction, and the stock had lost over $450 since the short squeeze. Furthermore, GME has lost over $20 billion in market value in few weeks. Consequently, amateur investors who had bought shares of GME amid the high volatility lost millions of dollars.
In addition, Mudrick Capital and other hedge funds that shorted GameStop before the frenzy had also lost millions of dollars. The battle between bulls and short-sellers in the GameStop saga is the first of its kind history of trading.
CEO of Robinhood, Reddit, Melvin Capital, Citadel, and Keith Gill will testify before Congress on Thursday about the GameStop frenzy. The hearing will be online and named: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”