E-Business Mules Meme Stock Trader Roaring Kitty: WSJ

Online brokerage platform E*Trade is reportedly considering removing GameStop ( GME ) meme stock trader Keith Gill, known as “Roaring Kitty,” from the platform over stock fraud concerns.

Gill bought a large amount of GME options on the E* trade before suddenly returning to X last month – selling shares in GameStop. Some of those expired that week and may have turned a profit, The Wall Street Journal reported on June 3, citing people familiar with the matter.

The firm and its owner, Morgan Stanley Gill, are arguing that GME could use its influence to its advantage and that recent posts on X and Reddit could be considered fraud, the sources said.

Removing it may attract negative attention and others may close their e*business accounts in association with Gill. No decision has been made and the companies may decide to do nothing, the Journal reported.

On May 13, Gill — the trader cited as a major influence on the 2021 meme stock rally and GameStop's short squeeze — began mysteriously posting to X, sending meme stocks and meme coins for the first time in three years.

Weeks later on June 2nd, Gill posted on Reddit for the first time since 2021 to share a screenshot showing that he owns $181.4 million worth of GME stock and is betting that GME will be at least $20 a share on June 21st.

GME rallied more than 19% in Sunday night trading after Gill's post. It closed up 21 percent at $28 on Monday, June 3, and rose nearly 8.5 percent to $30.36 in afternoon trading. According to Google Finance.

GME is up nearly 68% this year and Gill has gained over 60% since returning to X.

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Gill posted to Reddit again on June 3 to show that he had a $33.6 million profit on 5 million GME shares and a $51.8 million profit on the options.

Gill reportedly held several securities-industry licenses and was a registered broker with Massachusetts Mutual Life Insurance. A spokesman told the Journal that the Massachusetts Securities Division is investigating Gill's activities.

People familiar with the regulatory effort told the Journal that the Securities and Exchange Commission was reviewing GameStop's call options trading at the time of Gil X's posts.

The report added that the SEC had discussed internally whether such options trading could be considered fraudulent, but it was unclear whether it was specifically investigating Gill.

An SEC spokesperson told Cointelegraph that it does not comment on whether or not there is an investigation.

E*Trade, Morgan Stanley and the Massachusetts Securities Division did not immediately respond to Cointelegraph's requests for comment.

Gill did not immediately respond to a message sent via Reddit.

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Update (June 4, 3:10 am UTC): This article has been updated to add a comment from the SEC.