Roaring Kitty Lawsuit Dropped After 3 Days as GameStop Allegation Turns Out to be a Fraud

The Roaring Kitty lawsuit has drawn significant attention in the financial community. Keith Gill, known by his online alias “Roaring Kitty,” became prominent during the GameStop stock surge. A GameStop investor brought forward allegations of securities fraud in the lawsuit against him. This article explores the case’s developments and potential implications.

Voluntary Dismissal of the Lawsuit

In the latest crypto news, a GameStop investor, Martin Radev, accused Roaring Kitty of committing securities fraud but has since voluntarily dropped the complaint “without prejudice.” This legal term means that Radev retains the right to file a similar lawsuit in the future. The initial lawsuit was filed on June 28, and Radev dropped it on June 1, just three days later, by submitting a voluntary motion to dismiss in the United States District Court for the Eastern District of New York. The reasons behind the swift dismissal remain unclear, and Pomerantz Law, the firm representing Radev, did not respond to requests for comment.

What Happened in the Roaring Kitty Lawsuit?

The lawsuit claimed that Keith Gill used his social media influence to orchestrate a “pump and dump” scheme, artificially inflating GameStop’s stock price for his own financial gain. Radev alleged that Gill committed securities fraud by failing to inform his followers and other GameStop investors about his intention to sell 120,000 call options before their June 21 expiration date.

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Eric Rosen, a former federal prosecutor and founding partner at the law firm Dynamis, provided a legal analysis of the case in a June 30 blog post. Rosen suggested that the lawsuit’s main arguments could be easily countered by a “well-crafted” motion to dismiss from Gill. He indicated that Radev would likely struggle to prove that Gill had committed fraud, emphasizing the difficulty of demonstrating that Radev acted as a “reasonable investor.” Rosen stated, “It is unreasonable to purchase securities simply because an individual named Roaring Kitty posted innocuous tweets on social media.”

Keith Gill, the man behind the GameStop short squeeze of 2021, surprised everyone by returning to social media on May 13 after a two-year hiatus. His comeback involved posting a series of cryptic memes on his X account, which sparked significant volatility in GameStop’s stock price. In early June, Gill disclosed on Reddit that he held 120,000 GameStop call options with a June 21 expiration date. He exercised these options before their expiry and used the profits to acquire an additional four million GameStop shares for his portfolio.

Gill’s recent activities extend beyond GameStop. He has acquired nine million shares in the U.S.-based pet retailer Chewy, amounting to a 6.6% ownership stake in the company, as told by the crypto update in news from sources. This move has led to speculation among market commentators about the possibility of another GameStop-style short squeeze, this time involving Chewy. While some believe Gill might be planning another market manipulation, others argue that the mere attention from his purchases could drive Chewy’s stock price up regardless.

Conclusion

By exploring the intricate details of the Roaring Kitty lawsuit, this article sheds light on the intersection of social media influence, market behaviour, and legal ramifications in the latest crypto news. The swift dismissal of the Roaring Kitty lawsuit may embolden investors in traditional stocks and cryptocurrencies like Bitcoin and Ethereum, highlighting the ongoing tension between market innovation and regulatory oversight. As these markets evolve, similar legal challenges and their outcomes will shape the future of investing.  The outcome of this case and Gill’s future actions will undoubtedly have significant implications for investors and the broader financial landscape, states The BIT Journal.