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Class Action Lawsuit Filed Against 'Roaring Kitty' After GameStop Short Squeeze: What You Need To Know

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Class Action Lawsuit Filed Against 'Roaring Kitty' After GameStop Short Squeeze: What You Need To Know

Lawsuits related to the Gamestop Corporation (NYSE: GME) short squeeze have been stacking up following the volatile trading in the stock in January. 

Keith Patrick Gill, viewed by many as the leader of the debacle, is now facing a class action lawsuit

What Happened: On Tuesday, the law firm Hagens Berman announced that it has filed a securities class action suit against Gill in U.S. District Court, accusing him of “price manipulation of GameStop stock.”

Gill is known as "Roaring Kitty" on YouTube and DeepF*ckingValue on Reddit.

In prepared remarks Gill plans to deliver to the U.S. House Committee on Financial Services on Thursday, he denies wrongdoing. 

"I did not solicit anyone to buy or sell the stock for my own profit. I did not belong to any groups trying to create movements in the stock price. I never had a financial relationship with any hedge fund. I had no information about GameStop except what was public. I did not know any people inside the company, and I never spoke to any insider," Gill's testimony said. 

Hagens Berman is also suing MML Investors Services and Massachusetts Mutual Life Insurance Company.

The law firm accuses MML and Massachusetts Mutual Life of knowing that Gill was manipulating the stock price and intended to lead his 417,000 YouTube followers astray between Jan. 22 and Feb. 2.

“Investors from all walks of life were significantly damaged by the price manipulation incited by Keith Gill and his unsuspecting followers who hung on his every word,” Steve Berman, Hagens Berman managing partner, said in a press release. 

Why It Matters: Shares of GameStop rocketed over 1,040% before plummeting over 80%, which left many inexperienced traders who were following Gill on YouTube and in the r/WallStreetBets forum with massive losses.

During the period of the stock's volatility, Robinhood and a number of banks restricted trading of GameStop, along with a few other high-flying stocks, which caused further damage as customers were unable to sell shares before prices fell further.

Hagens Berman said it seeks to recover damages it alleges were caused by Gill for traders who suffered financial losses due to trading GameStop.

 

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