'Roaring Kitty' GameStop Trades Under Investigation in Mass.
The investigation comes on top of a threat by E-Trade to ban the meme stock trader.
Secretary of State William Galvin, Massachusetts’ top securities regulator, is investigating the trading activities of Keith Patrick Gill, known as “Roaring Kitty,” the meme stock trader who recently disclosed a huge position in GameStop.
A spokesperson for Galvin’s office confirmed the investigation to ThinkAdvisor Wednesday morning.
On Monday, E-Trade said that it was mulling banning Gill — known as “DeepF——Value” on Reddit — after Gill posted a screenshot of a $116 million bet on GameStop, The Wall Street Journal reported. GameStop soared 21% on Monday after Gill’s post.
The Securities and Exchange Commission is also reviewing trades in GameStop call options around the time of Gill’s post, the Journal reported, though it was not known if the agency was investigating Gill himself.
“The SEC does not comment on the existence or nonexistence of a possible investigation,” an agency spokesperson told ThinkAdvisor in an email.
2021 Investigation
In September 2021, Galvin ordered MML Investors Services LLC, a subsidiary of MassMutual, to overhaul its social media policies and pay a $4 million fine over the company’s failure to supervise agents, including Gill.
In levying the fine in 2021, Galvin said that MassMutual failed to supervise Gill as he posted more than 10 days’ worth of YouTube videos and hundreds of social media posts, which fueled a steep run-up in GameStop stock.
The period of Gill’s employment overlapped with his involvement in the GameStop and meme stock frenzy that occurred in late 2020 and early 2021.
While employed by MassMutual, Gill was responsible for creating educational content for use by MassMutual broker-dealer agents to present to individuals.
That case against Gill “has been closed out,” and any findings in the current investigation would lead to a new case, the Massachusetts spokesperson said Wednesday.
Gill has not been registered in Massachusetts since 2021. The state securities division investigates “all activity whether you are registered or unregistered that could negatively impact the market,” the spokesperson said.
Roaring Kitty vs. Nancy Pelosi
Reactions on X, formerly known as Twitter, to the scrutiny of Gill have been resoundingly negative, with many users comparing his situation with the freedom of politicians to trade based on nonpublic information.
An account that tracks former House speaker Nancy Pelosi’s trades, @PelosiTracker, called it “classic” that Roaring Kitty was facing a possible E-Trade ban and a state investigation ”All while Politicians continue to freely trade in stocks they oversee.”
An account purported to belong to Unusual Whales, a service that tracks stock trading by politicians, pointed out that “Massachusetts’ politicians have been trading themselves,” giving examples of lawmakers who had failed to timely disclose trades or had traded before major news events.