Massachusetts financial educator Keith Gill said basement YouTuber became Reddit folk hero for his early investment in GameStop before a major increase – and subsequent decline – in the company’s shares in a class action lawsuit was sued.
In the case, which was filed in federal court in Massachusetts, it is alleged that Gill ‘adopted the false persona of an amateur, everyday fellow who simply looked at the guy’ to recruit investors for the short press, thus constitute security fraud. .
Gill, who has more than 400,000 subscribers to his YouTube account, Roaring Kitty, has acted as a security broker for Massachusetts Mutual in his capacity as a broker.
When a user named DeepFuckingValue made his first post on Reddit’s r / WallStreetBets forum in September 2019, it did not make too many waves on a message board where retailers regularly share their odd stocks and losses. “Holy shit, what made you drop 53K on gamestop?” a user commented.
At that point, the stock in the video game store was trading at around $ 5 per share. Yet Gill, when placed anonymously on the account, continued to share his updates; and Reddit retail investors, along with some hedge funds, soon jumped on the bandwagon. In January, $ GME shares traded at just under $ 500 a share, according to Gill’s initial investment a payout of as much as $ 48 million.
A report Gill wrote on January 27 about his peak payout is full [WallStreetBets] users tell how Gill encouraged them not only to buy GameStop shares, but further inspired them to hold their shares in order to manipulate the market to ensure a loss for those in short positions, ”reads the lawsuit. .
The chief prosecutor in the lawsuit, a Washington man named Christian Iovin, “used about $ 200,000 as collateral to sell call option contracts for GameStop shares when the stock was less than $ 100,” the case reads. Iovin and his attorney, Reed Kathrein, declined to comment for this article.
On his YouTube channel, where he ‘provides educational live streams where I share my daily routine of tracking stocks and conducting investment research’, Gill has repeatedly pointed viewers to a possible short press on GameStop stocks, where investors’ buy a stock against which there is strong betting. Of the 80 videos on Gill’s channel, 56 refer to GameStop, the lawsuit reads.
The lawsuit also names MassMutual, Gill’s former employer, as a defendant, claiming that the insurance company “has legal and regulatory obligations to supervise Gill to prevent this behavior.”
According to The Wall Street Journal, Thanked Gill on January 28, the day after his peak payout, and the day before his first public interview, also with the Magazine, has been published.
Gill’s actions also drew the attention of government officials and federal officials. William Galvin, Massachusetts’ secretary of state, filed a lawsuit against Gill earlier this month to investigate whether his daily job affected his trade, according to The New York Times.
MassMutual has the Times that it did not know of Gill’s trade until he submitted his resignation on January 21 and would ask him to stop if they knew. MassMutual did not immediately respond to a request for comment on this article.
Gill is due to testify with Reddit and Robinhood executives on Thursday during a congressional hearing on the rise in the shares arranged by Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee.
In prepared remarks released Wednesday before his congressional testimony, Gill denies any wrongdoing.
“The idea that I used social media to promote GameStop shares to unconscious investors is ridiculous,” Gill said in a statement. “I was very clear that my channel was for educational purposes only, and that my aggressive investment style would probably not be suitable for most people who visit the channel.”
GameStop investors also filed a class action lawsuit against Robinhood trading app last month after restricting trading to GameStop and other shares popular on r / WallStreetBets, which sent Redditors and app users into a crash.
You can read the lawsuit here.