GameStop Shareholder Quickly Drops Fraud Claim Against 'Roaring Kitty'

(Bloomberg) — A lawsuit accusing popular stock market influencer Keith Gill, better known as “Roaring Kitty,” of engaging in a “pump and dump” scheme involving shares of GameStop Corp. (GME) has been dropped days after it was filed.

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In a class-action lawsuit filed Friday in federal court in Brooklyn, New York, GameStop shareholder Martin Radev sued Gill for securities fraud, claiming he sought to manipulate the stock price for his own benefit. In a court filing late Monday afternoon, Radev said he was voluntarily dropping the complaint.

It’s unclear why Radev dropped the complaint, and his lawyers did not immediately respond to requests for comment. The dismissal was made without prejudice, meaning he is free to file the complaint again.

Gill also did not respond to an email requesting comment.

Gill, one of the public faces of 2021’s stock meme craze, has amassed more than a million subscribers on his YouTube channel “Roaring Kitty” and his Reddit page “DeepF***ingValue.” He resurfaced in May and began posting about Gamestop again on X, the social media platform formerly known as Twitter.

The complaint alleges that Gill acquired 120,000 call options on GameStop before he began posting about the company in May. The stock, which was trading around $17 just before Gill began posting, soared to $48.75 on May 14.

On June 2, he disclosed that he owned 5 million shares of GameStop and 120,000 call options that were set to expire on June 21. By June 13, Gill's holdings had grown to more than 9 million shares of GameStop with no outstanding call options.

Gill “quietly sold and/or exercised (i.e., surrendered) all of his 120,000 GameStop call options for a substantial profit, ostensibly to increase his own ownership interest in GameStop stock by over 4 million shares,” Radev said in the complaint.

GameStop shares have since fallen, though they remain higher than before Gill's posts. They closed at around $23 Monday afternoon.

GameStop’s recent rally has been less pronounced than during the meme-stock frenzy. The company surged more than 1,700% during one stretch in January 2021, and the stock’s stratospheric rise appeared to pit brave individual investors against sophisticated hedge funds that were massively shorting the struggling retailer.

The story continues

On Monday, shares of Chewy Inc. (CHWY) climbed as much as 10% after Gill disclosed a 6.6% passive stake in the online pet food and supply retailer.

The filing with the U.S. Securities and Exchange Commission came days after the investor posted a photo with a puppy without comment on X. The post briefly propelled the pet food retailer to a one-year high on Thursday.

The case is Radev v. Gill, 24-cv-04608, United States District Court, Eastern District of New York.

(Updated with voluntary dismissal of complaint.)

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