Keith Gill aka Roaring Kitty, before promoting GameStop on X and Reddit, acquired call options on the company's shares, which can be interpreted as market manipulation. This is the conclusion reached by representatives of his broker, writes with reference to WSJ sources.
At the end of May, some of the derivatives acquired by Gil matured. The interlocutors of the publication noted that Roaring Kitty could make a profit on expired contracts.
Broker E*Trade and its parent company, Morgan Stanley, are concerned that the analyst may use his influence to pump GME to their advantage.
Experts are discussing whether recent posts on social networks can be considered manipulation, and are also considering the option of excluding Gill from the number of clients of the platform.
Company executives fear that such a move could create a negative background and encourage other users to close their accounts in E*Trade as a sign of solidarity. A decision has not yet been made, and firms may refuse to take specific actions, the newspaper reports.
According to reports, Gill holds several securities licenses. The specialist received the registration of a broker in Massachusetts Mutual Life Insurance. The publication became aware of the beginning of an investigation by the Massachusetts Securities Department into the activities of Roaring Kitty.
WSJ sources also reported on the SEC's review of GameStop securities options transactions during the period when Gill posted his posts at X. The regulator is considering recognizing transactions as manipulations, but does not specify whether the verification specifically applies to Roaring Kitty.
On May 13, three years later, Gill returned to activity on his X account with a series of cryptic posts that triggered a spike in AMC and Gamestop shares associated with him.
In cryptocurrencies, a wave of hype has unfolded around expert-related meme tokens on Solana. So, one of the traders managed to get a 32-fold profit on the KITTY pump in a day.
Such increased attention to Gill is due to his active participation in 2020 in the "war" of retail traders against Wall Street.
On June 2, Roaring Kitty presented a screenshot of its investments in GameStop.
According to the publication, he bought 5 million GME for $115.7 million and invested $65.7 in a call option, betting that by June 21 the securities would be worth at least $20. At that time, the analyst earned more than $9.3 million in a regular position, but had a cash loss of $2.5 million on derivatives.
Following the results of the regular session on June 3, GME shares rose by 21% to $28. The opening took place at the level of $40 (an increase of 72.9%).
Daily chart of GameStop Corporation shares on the NYSE. Data: Finviz.Against the background of news from the WSJ, the KITTY meme coin associated with Gill collapsed in price by 44.7%, according to CoinGecko. The decrease in GME (-8%) has become more moderate.
Recall that on May 29, KITTY and GME instantly added 19% and 55% in value following the rise in GameStop stock prices.
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