(Reuters) – Social media character “Roaring Kitty”, who became a key player in GameStop Corp’s frenetic high last month, is facing a lawsuit alleging that he violated securities laws and caused “huge losses “to investors, just a day before testifying before US lawmakers.
Keith Gill, known as Roaring Kitty on YouTube and DeepF *** ingValue on the Reddit forums, allegedly hid his sophisticated financial training and tricked retail traders into buying inflated stocks, according to a class action filed in Massachusetts federal court on Tuesday.
Gill is due to testify on Thursday in Congress about the so-called “Reddit rally”, which was hailed as a victory for the small against Wall Street hedge funds that were betting against GameStop and other struggling companies. The lawsuit claims that Gill “incited” the demonstration.
Gill downplayed his impact and refuted claims that he violated all laws, noting in prepared parliamentary testimony published on Wednesday that he used publicly available information to determine that GameStop was undervalued. It was a vision he shared with a “tiny” follower on social media before the January events, he said.
“The idea that I used social media to promote GameStop shares to involuntary investors is absurd,” said Gill in the statement. “I was very clear that my channel was for educational purposes only and that my aggressive investment style would hardly be suitable for most people who access the channel.”
The suit filed by Christian Iovin, a Washington state resident who bought stock options from GameStop, also cites defendants Massachusetts Mutual Life Insurance Co and its subsidiary MML Investors Services LLC, which employed Gill until January 28.
MassMutual was required to supervise its activities as a registered broker, according to the process. The company declined to comment.
MassMutual told Massachusetts regulators that it was unaware of Gill’s external activities.
Gill reportedly bought GameStop stock for $ 5 and then used social media to raise the stock from about $ 20 in early January to more than $ 400 in just two weeks, violating securities laws against manipulation of the according to the process.
The stock closed down 7.2% to $ 45.94 on Wednesday.
Gill remains optimistic about GameStop’s recovery, describing it as “impressive” that the market continues to underestimate the company, according to his prepared comments.
“In short, I like the stock,” he said.
Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Chris Prentice in Washington; Editing by Noeleen Walder and Jonathan Oatis