WallStreetBets agitator Keith Gill faces class action lawsuit over Gamestop Reddit Rally
YouTuber known as Roaring Kitty accused of "deceitful and manipulative conduct"
The GameStop share price surge last month was lauded by some as a revolution of "the little guy" in the face of Wall Street fat cats. But as with all revolutions, heads inevitably roll, and the GameStop Reddit Rally appears no different.
US law firm Hagens Berman has filed a class action lawsuit against Keith Patrick Gill, MML Investors Services, and Massachusetts Mutual Life Insurance Company.
Gill, a popular YouTuber otherwise known as "Roaring Kitty", has been singled out as one of the most influential voices on the WallStreetBets subreddit, which spurred on the GameStop trading frenzy last month.
"He 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," the suit reads.
At the time of the surge, Gill was allegedly licensed by MML as a registered representative, and employed Massachusetts Mutual as a "financial wellness director." As such, the suit argues that both organisations had "legal and regulatory obligations to supervise Gill to prevent this very conduct."
"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 GameStop shares," the suit reads.
"He 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 and a number of others involved in the Reddit Rally -- along with the Robinhood and Reddit CEOs -- are set to testify before Congress today.
In a prepared testimony presented to the House Financial Services Committee, Gill said: "The idea that I used social media to promote GameStop stock to unwitting investors is preposterous.
"I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel."
GameStop share prices peaked at $375 in late January, surging from below $40 in just a few days. As the dust settled however, the ailing retailer's share price has returned to $45.94 as of yesterday, down around 7%.