By
Mayowa Adebajo
July 1st, 2024
Formal federal prosecutors said that the plaintiff’s charges on Gill pulling off a fraud wouldn’t stand ground as it would be obvious that he was trying to profits from Gill’s hype over GameStop, thereby failing to prove himself as a reasonable investor.
An investor who had reportedly sued GameStop sensation ‘Roaring Kitty’, real name Keith Gill, has dropped the lawsuit, with charges of alleged securities fraud, within three days of filing. On Monday, July 1, plaintiff Martin Radev dropped the suit after filing for a voluntary motion to dismiss the case, in the Eastern District Court of New York.
It is unclear as to why the plaintiff and his law firm Pomerantz Law dropped the lawsuit in such a short period of time. Note that the plaintiff dropped the lawsuit “without prejudice”, meaning that he can decide to file the lawsuit again in the future.
Martin Radev first filed the lawsuit last week on June 28 alleging that Gill used his influence on social media to orchestrate a “pump and dump” scheme. As per Radev, Gill artificially inflated the price of GameStop shares for his personal financial benefits while causing losses to investors in the process.
The plaintiff also alleged Gill of committing securities fraud by failing to inform his followers and other GME investors, of selling nearly 120,000 GME call options ahead of the June 21 expiry.
Here’s Why Investor Dropped Lawsuit on Roaring Kitty
In a blog post dated June 30, Eric Rosen, a former federal prosecutor and founding partner at the law firm Dynamis LLP, stated that the lawsuit relied on three main arguments that could be readily dismissed by a “well-crafted” motion from Gill.
Rosen said that it wasn’t easy for Radev to prove that Gill had committed fraud. He also said that Radev was clearly trying to profit from the hype of Gill’s tweets, thus he would struggle to provide himself a “reasonable investor” in a court of law.
“It is unreasonable to purchase securities simply because an individual named Roaring Kitty posted innocuous tweets on social media,” said Rosen.
After the GameStop short squeeze of 2021, Keith Gill became popular as Roaring Kitty within the investing circle. After a two-year social media hiatus, Gill made a surprise entry on social media on May 13 by posting a series of cryptic tweets through his X account. This led to massive volatility in the GME stock price.
In early June, Gill posted on Reddit, revealing his possession of approximately 120,000 GME call options with a June 23 expiration date. He exercised these options before their expiry, using the profits to acquire an additional four million GME shares for his portfolio.
Recently, Gill has made another significant move by acquiring nine million shares in the US-based pet retailer Chewy, representing a 6.6% ownership stake in the company. Many market analysts believe that Gill could be trying to pull another short squeeze with Chewy.