Roaring Kitty Gets Sued for Securities Fraud Over His Memes Allegedly Promoting GameStop
The case was filed by someone who bought around $1,060 worth of GME, mostly during or after Roaring Kitty’s livestream.
- Memes cited as evidence in the Roaring Kitty case may not hold up in court as they didn’t directly promote GameStop.
- Former federal prosecutor Eric Rosen argues the lawsuit will likely be dismissed due to a lack of proof that Gill misled investors.
- Roaring Kitty is accused of engaging in a “pump-and-dump” scene.
Kitty Gill, known as Roaring Kitty or Deep F***ing Value, has been sued for alleged securities fraud. The lawsuit claims his social media influence and memes manipulated stock prices, with detailed interpretations provided for each post.
Interestingly, the lawsuit included a post tagging the GME coin unrelated to GameStop and other memes. This could indicate an attempt to link the GME Solana memecoin to the case, or it might simply be an error.
The lawsuit alleges that Roaring Kitty’s memes manipulated the stock price, claiming he engaged in a “pump-and-dump” scheme by quietly buying GME at low prices, reigniting the meme stock movement, and then selling and exercising his stock options.
A former federal prosecutor believes the case is weak and likely to be dismissed with a motion to dismiss.
Can Memes be Used as Evidence?
Emojis, texts, and tweets have been accepted as evidence, but it remains to be seen if the case against Gill will hold since there was no direct promotion of GameStop. The closest comparison is Elon Musk’s joking tweet about taking Tesla private, though key differences exist, such as Musk mentioning specific details like the company name, price, and financial means:
- Tesla — company name
- $420 — price
- Funding secured — financial means
Regarding Roaring Kitty, the specific memes being submitted as evidence in the case do not directly promote GameStop. Not in the same post or medium, Roaring Kitty also shared his portfolio, which included holdings and options.
The memes submitted as evidence in the case against Roaring Kitty do not directly promote GameStop. Roaring Kitty also shared his portfolio, including his holdings and options, separately.
Former federal prosecutor Eric Rosen wrote a blog post on the case, asserting that it would likely be dismissed if Gill filed a motion. He argued that the lawsuit’s claim — that Gill should have disclosed his intent to sell his options before their expiry — would not hold up in court, as no “reasonable person” or investor would expect him to retain the options until expiry.
Rosen also stated that the plaintiff aimed to profit from the price impact of Gill’s posts rather than the actual content. He emphasized that for a fraud case to succeed, it must prove the defendant intentionally misled investors by withholding crucial information.
Who Is Behind the Lawsuit?
Martin Radev held approximately $1,060 worth of stock and some calls and puts. A notable portion of these shares was likely purchased during or after Roaring Kitty’s last livestream, in which he stressed that viewers should not take his statements as financial advice.
According to his suspected LinkedIn profile, Martin Radev is a senior associate at Cornerstone Fund Services. He previously worked at Alter Domus, which services 14 of the 20 largest private equity houses, 18 of the 20 largest real estate firms, and 15 of the 20 largest private debt managers.
The lawsuit was filed “individually and on behalf of all others similarly situated,” but it does not specify the holdings of others who might have been affected by the alleged manipulation.
