A GameStop investor who sued Keith Gill, popularly known as Roaring Kitty, for alleged securities fraud, dropped his lawsuit just three days after filing it.
Plaintiff Martin Radev voluntarily dismissed the suit on June 1, submitting a motion to dismiss in the United States District Court for the Eastern District of New York. The reasons behind the swift withdrawal of the lawsuit remain unclear, as Pomerantz Law, the firm representing Radev, did not respond immediately to Cointelegraph’s request for comment.
The lawsuit was dismissed “without prejudice,” allowing Radev the option to file a similar lawsuit again in the future.
Allegations of Securities Fraud
The lawsuit was initially filed on June 28, with Radev accusing Gill of using his influence on social media to orchestrate a “pump and dump” scheme. Radev claimed that Gill’s actions artificially inflated the price of GameStop shares, causing investor losses while benefiting Gill financially.
Specifically, Radev alleged that Gill had committed securities fraud by failing to inform his followers and other GameStop investors of his plan to sell approximately 120,000 call options before their June 21 expiration date.
Eric Rosen, a former federal prosecutor and founding partner at the law firm Dynamis, commented on the lawsuit in a June 30 blog post. Rosen argued that the lawsuit’s foundation rested on three main arguments that could be easily dismantled by a “well-crafted” motion to dismiss from Gill.
Rosen highlighted that Radev would face significant challenges in proving that Gill committed fraud. He noted that Radev appeared to be attempting to capitalize on the hype surrounding Gill’s tweets and would struggle to prove himself a “reasonable investor” in a court of law. Rosen stated, “It is unreasonable to purchase securities simply because an individual named Roaring Kitty posted innocuous tweets on social media.”
Background on Keith Gill and GameStop
Keith Gill, the man behind the GameStop short squeeze of 2021, made a surprising return to social media on May 13 after a two-year hiatus. His comeback included posting a series of cryptic memes on his X account, which led to significant volatility in GameStop’s stock price in the following months.
In early June, Gill also made several posts on Reddit, disclosing his ownership of around 120,000 GameStop call options set to expire on June 21. He exercised these options before their expiration and used the profits to acquire an additional four million shares for his portfolio.
Recent Investments and Speculations
Gill’s latest notable move has been to acquire nine million shares in the United States-based pet retailer Chewy, which accounts for a 6.6% ownership stake in the company.
This acquisition has led to speculation among commentators. Some suggest that Gill might be preparing to execute another GameStop-style short squeeze with Chewy, while others believe that the mere attention from his purchases will be sufficient to boost the stock’s price.
| Date | Event |
|---|---|
| May 13 | Keith Gill returns to social media, posting memes |
| Early June | Gill discloses ownership of 120,000 GameStop call options |
| June 1 | Martin Radev dismisses lawsuit against Gill |
| June 21 | Expiration date for Gill’s GameStop call options |
| June 28 | Radev files lawsuit accusing Gill of securities fraud |
| June 30 | Eric Rosen comments on the lawsuit’s potential weaknesses |
| Recent | Gill acquires nine million shares in Chewy |
The rapid dismissal of the lawsuit against Keith Gill highlights the complexities and challenges of proving securities fraud in court. Despite the allegations, the swift withdrawal suggests that the case may have lacked the necessary substance to proceed.
Gill’s actions and investments continue to captivate the market, with his recent acquisition of a significant stake in Chewy stirring further speculation. As the situation evolves, it remains to be seen whether Radev or others will refile similar lawsuits or if Gill will face further legal scrutiny.
Featured image credit: fabrikasimf via Freepik