Meme stock brokerage Roaring Kitty sued over GameStop stock craze

The famous meme stock investor known as Roaring Kitty has been sued for allegedly orchestrating a “pump and dump” scheme involving an American video game retailer.

In a proposed class action lawsuit filed late last week, GameStop shareholder Martin Radev claimed that Keith Gill was trying to manipulate the stock for his own benefit.

The lawsuit alleges that Gill, who has resurfaced after gaining a cult following online during the pandemic, purchased 120,000 call options in GameStop before he began posting about the company in May.

Gill returned to online chat forum Reddit two months ago with a post showing that a £91m bet had been placed on the beleaguered video games retailer.

The post sent the stock’s value skyrocketing in a move reminiscent of those seen in the meme stock craze of 2021.

The screenshot suggests Gill could own 5 million shares, fueling investor confidence in the business.

This followed his reappearance on X, formerly known as Twitter, a few weeks earlier, when he posted cryptic tweets after a two-year absence.

Shares had risen from just $10.17 in April to $33.13 in early June.

But Radev alleges that Gill “quietly sold and/or exercised (i.e., abandoned) his 120,000 GameStop call options at a large profit, apparently to increase his own stake in GameStop stock by more than 4 million shares.”

And while GameStop shares have retreated in recent weeks, they are still up 36 per cent so far this year, giving the group a market capitalisation of £6.6bn.

Gill fueled a buying spree in GameStop stock three years ago, when the shares soared above $120 from as low as $3 in three months before pulling back.

It inspired the 2023 film Dumb Money.