The social media persona “Roaring Kitty”, who became a key player in last month’s frenzied rally in shares of GameStop Corp, is facing a lawsuit alleging he violated securities laws and caused “huge losses” for investors, just a day before he is set to testify before US lawmakers.
Keith Gill, known as Roaring Kitty on YouTube and DeepF***ingValue on Reddit forums, allegedly hid his sophisticated financial training and duped retail traders into buying inflated stocks, according to a class action lawsuit filed in federal court in Massachusetts on Tuesday.
Gill is scheduled to testify on Thursday in Congress about the so-called “Reddit rally,” which was hailed as a victory of the little guys against Wall Street hedge funds betting against GameStop and other struggling businesses. The lawsuit holds that Gill “incited” the rally.
Gill downplayed his impact and rebutted claims he violated any laws, noting in prepared congressional testimony published on Wednesday that he used publicly available information to determine GameStop was undervalued. It was a view he shared with a “tiny” following on social media ahead of January’s events, he said.
“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill said in the testimony. “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.”
The lawsuit by Christian Iovin, a Washington state resident who purchased GameStop stock options, also names as defendants Massachusetts Mutual Life Insurance Co and its subsidiary MML Investors Services LLC, which employed Gill until Jan. 28.
MassMutual was obligated to supervise his activities as a registered broker, according to the lawsuit. The firm declined to comment.
MassMutual told Massachusetts regulators it was unaware of Gill’s outside activities.
Gill allegedly purchased GameStop stock for $5 and then used social media to drive shares from around $20 in early January to more than $400 in just two weeks, violating securities laws against manipulating the market, according to the lawsuit.
The stock closed down 7.2 percent at $45.94 on Wednesday.
Gill remains bullish on GameStop’s turnaround, describing it as “stunning” that the market continues to undervalue the firm, according to his prepared remarks.
“In short, I like the stock,” he said.