The king of r/WallStreetBets has been slapped with a class action lawsuit

0
11
The king of r/WallStreetBets has been slapped with a class action lawsuit

The man credited with architecting the recent GameStop short squeeze and stock trading frenzy has been hit with a class action lawsuit.

Better known by pseudonyms Roaring Kitty and DeepF***ingValue, redditor Keith Gill stands accused of tricking investors into purchasing overpriced stocks and violating securities law that protects against market manipulation. He is also said to have concealed his background in institutional finance.

The lawsuit was filed by US resident Christian Iovin, who purchased GameStop stock options during the recent market frenzy, and names Massachusetts Mutual Life Insurance Co and subsidiary MML Investors Services LLC as co-defendants.

The suit alleges that MassMutual was responsible for monitoring Gill’s trading activities, as his employer until January 28, but the firm denies any knowledge of his extracurricular pursuits.

Gamestop, r/WallStreetBets and the stock trading frenzy

Anyone familiar with social content platform Reddit will know the website is broken up into a large number of different communities, known as subreddits. Each subreddit caters to a different hobby or interest.

A subreddit known as r/WallStreetBets, of which Gil is a prominent member, was responsible for energizing the buying frenzy that saw GameStop stocks rise from $18 at the start of January to a peak of more than $450 per share.

Under the username DeepF***ingValue, Gill has posted repeatedly about perceived opportunities linked with GameStop stock, going as far back as September 2019. He has also published tens of YouTube videos on the topic in recent months, including an hour-long technical analysis viewed by roughly 850,000 people. 

Gill is thought to have purchased GameStop stock at a price of $5 per share and stands accused of wielding his influence online to drive the price to unprecedented heights. In a prepared statement, he has denied these allegations.

“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” he wrote.

“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.”

He went on to explain that he had used publicly available information in his analysis of GameStop stock, which he maintains is undervalued.

Separately, Gill is also set to speak before Congress later today, along with representatives from Reddit, hedge fund Melvin Capital and trading platform Robinhood. The virtual hearing will investigate how the value of GameStop stock was allowed to soar in such a dramatic fashion.

Via BBC

LEAVE A REPLY

Please enter your comment!
Please enter your name here