The YouTuber “Roaring Kitty”, whose real name is Keith Gill, is featured in the USA sued for his involvement in the GameStop stock hype. A class action lawsuit accuses Gill of violating stock corporation laws and causing investors “huge losses,” as in the Massachusetts The complaint filed was dated Tuesday.
The lawsuit was filed by a class action law firm. It represents people who bet on GameStop stock price losses but lost money due to the hype.
In the lawsuit, Gill is accused of being an expert in securities trading who manipulated the market in order to profit from it himself. The YouTuber hid his expertise and led private investors to buy shares on social media. That triggered a jump in price. “Gill’s fraudulent and manipulative behavior not only violated numerous industry regulations and rules, but also various securities laws,” it said. It has undermined the integrity of the market.
Gill wants to defend himself before Congress
After the fabulous ups and downs of the GameStop share price, the YouTuber had to testify next to hedge fund managers and company bosses in front of a committee of the US House of Representatives on Thursday. Gill released a written version of his proposed testimony on Wednesday. “It’s absurd to think that I could have used social media to promote GameStop shares to ignorant investors,” he wrote. “I’ve made it clear that my channel was for educational purposes only and that my aggressive investing style probably wasn’t right for most people.”
At the hearing on Thursday, Gill, the head of the trading platform Robinhood, Vlad Tenev, and the CEOs of the hedge funds Citadel and Melvin had to testify. The Financial Services Committee is investigating how the shares of the video game retail chain GameStop in particular, but also those of other companies, could be propelled to dizzying heights. Small investors had made concerted purchases to force hedge funds to cancel their bets on the decline of the GameStop price. In doing so, they had even put these shortsellers into a mess and upset stock exchanges around the world. The crypto currency Ripple has also recently seen violent price movements on the market.
Losing bets at GameStop have cost some hedge funds dearly. Since the beginning of the year, their losses add up to 12.5 billion dollars, according to recently published data from data provider Ortex. Some funds even ran into existential difficulties, including Melvin Capital. The hedge funds Point72 and Citadel had to save their partner from collapse with an injection of billions.