The Massachusetts securities regulator has launched a probe into the trading activities of Keith Gill, widely known as “Roaring Kitty,” a prominent figure in the 2021 GameStop stock saga. This investigation comes as Gill returns to the public eye with significant investment positions in the embattled video game retailer, GameStop.
Background on Keith Gill and ‘Roaring Kitty
Keith Gill gained fame as “Roaring Kitty” during the 2021 meme stock frenzy. His online presence and bullish stance on GameStop stock led to a surge in the stock’s price, spurring a wave of retail investor interest and activity. Gill’s influence during this period was profound, attracting attention from both supporters and regulators.
The New Investigation
The Massachusetts Secretary of State, Bill Galvin, has confirmed that the state’s top securities regulator is scrutinizing Gill’s recent trading activities. While details of the investigation are sparse, a spokesperson for Galvin’s office has declined to provide further commentary. The Wall Street Journal was the first to report on this new inquiry.
Roaring Kitty’s Return to Reddit
GameStop shares experienced a notable rise after “Roaring Kitty” resurfaced on Reddit, posting about a $116 million investment in the company. This was the first post from his account in three years and suggested that Gill might have a substantial paper profit from his GameStop options. Despite the surge, shares fell by approximately 5% by mid-morning trading.
Verifying the Authenticity of the Post
There is currently no independent verification from Reuters or other sources confirming that the Reddit post was indeed made by Keith Gill or that the disclosed positions are authentic. Attempts to contact Gill for comment have been unsuccessful. It’s important to note that regulatory inquiries and probes often do not imply any wrongdoing and may not lead to enforcement actions.
Galvin’s office had previously investigated Gill’s activities during the 2021 meme stock surge. This earlier probe concluded with a settlement involving Gill’s former employer, MassMutual, which was penalized for failing to supervise his activities adequately. The settlement marked the end of that particular investigation.
The Meme Stock Frenzy of 2021
In 2021, Keith Gill’s postings on Reddit showcasing his bullish trades in GameStop shares incited a significant increase in demand for so-called “meme stocks.” These stocks, often associated with companies that had weak fundamentals, gained a cult-like following due to social media hype among retail investors. The phenomenon led to extreme volatility and substantial financial movements within the stock market.
The U.S. Securities and Exchange Commission (SEC) conducted its own investigation into the 2021 meme stock craze. The SEC’s findings indicated that marketplace systems functioned as intended during the frenzy. However, the investigation did not uncover evidence supporting the retail investors’ claims that short sellers were the primary drivers behind the stock’s wild price swings.
Current SEC Actions
The Wall Street Journal also reported that the SEC is currently examining options trading in GameStop. When approached for comments, a spokesperson for the SEC declined to confirm or comment on the specifics of this ongoing investigation.
The renewed scrutiny of Keith Gill’s trading activities underscores the ongoing regulatory interest in the events surrounding the 2021 meme stock phenomenon. As Gill reemerges in the public trading sphere, regulators are keen to ensure compliance and transparency in the activities of influential market participants. Whether this new investigation will lead to any substantial findings or actions remains to be seen. The situation highlights the fine line between influential trading strategies and regulatory oversight in the modern digital trading environment.
