Lawsuit Against Roaring Kitty Maybe Will Be Canceled

Bittime - It is predicted that the lawsuit against Roaring Kitty over GameStop stock trading will probably be dropped. Understand the full explanation until the end of the article.

Roaring Kitty Sued

Keith Gill, known as Roaring Kitty and best known for his GameStop stock trading activity in 2021, is facing a class action lawsuit over alleged securities fraud.

The lawsuit was filed June 28 in the Eastern District Court of New York. Gill was accused of not properly disclosing the options transactions he made, allegedly as part of a "pump and dump" scheme to mislead investors.

GME Stock Price Rises Due to Lawsuit

The plaintiff, Martin Radev, claims to have suffered losses as a result of Gill's actions. On May 13, after Gill posted on social media, GME's share price jumped 180%.

On June 2, Gill revealed on Reddit that he owned a lot of GME shares and options, which again drove up the share price. On June 13, Gill stated that he had exercised all options and made millions of dollars.

Roaring Kitty Lawsuit May Be Dropped

Eric Rosen, a former federal prosecutor, argued that the lawsuit would probably be dismissed because Gill was not required to disclose his trading intentions in advance, and the content of Gill's posts would be difficult to prove were misleading.

Rosen explained that to win a securities fraud case, a plaintiff must prove that there was a materially misleading statement or omission and that investors relied on the information, which caused the loss.

In this case, it is difficult to prove that Gill had the intent to defraud or that his posts directly caused financial loss to investors.

Using Social Media Does Not Violate the Law

Additionally, Rosen added that social media is a platform where people often share their opinions and investment strategies so this should not necessarily be considered legally binding investment advice.

Therefore, plaintiffs may face a major challenge in proving that Gill violated securities laws.

Gill, who gained immense popularity in the online investor community for his trading strategy with GameStop shares, has always maintained that he was sharing his own experience and did not intend to mislead anyone.

In his various posts, he often reminds his followers that stock trading involves risks.

Conclusion

The case attracted widespread attention because it reflects tensions between individual investors who use social media to influence stock markets and traditional financial institutions that oversee trading activity.

The outcome of this case could have a significant impact on how individual investors interact with the markets and each other in the future.

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