E*Trade, the online trading platform, is reportedly contemplating banning Keith Gill, known as “Roaring Kitty,” from its platform over concerns of stock manipulation linked to GameStop (GME).
Gill, credited as the key figure in the 2021 meme stock rally and the GameStop short squeeze, bought a large amount of GME options on E*Trade before his unexpected return to X last month, sparking a surge in GameStop shares.
According to a June 3 report from The Wall Street Journal, sources close to the situation mentioned that some of these options expired that same week, potentially resulting in profits for Gill.
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Morgan Stanley, the owner of E*Trade, and the firm itself are wary that Gill’s influence could be used to inflate GME’s stock price for personal gain. They are assessing whether his recent posts on platforms like X and Reddit could be seen as manipulative.
The firm is also considering the fact that removing Gill might lead to a backlash, with other users potentially closing their E*Trade accounts in solidarity. As of now, no final decision has been made, and the firm may decide to take no action.
On May 13, after a three-year break, Gill started posting cryptic messages on X, which boosted meme stocks and memecoins.
On June 2, Gill returned to Reddit for the first time since 2021 and shared a screenshot showing he held $181.4 million worth of GME stock and call options, betting on GME reaching at least $20 per share by June 21. This post caused GME shares to soar by over 19% during Sunday night trading.
Gill continued to post on Reddit on June 3, showing he had a $33.6 million gain on his 5 million GME shares and a $51.8 million gain on his options.
Holding several securities-industry licenses, Gill was a registered broker with Massachusetts Mutual Life Insurance. The Massachusetts Securities Division is investigating his activities, according to a spokesperson.
The Wall Street Journal’s sources revealed that the Securities and Exchange Commission (SEC) is also reviewing GameStop call options trades around the time of Gill’s X posts. The SEC is internally debating if these trades could be considered manipulative, but it is unclear if Gill is specifically under investigation.
Therefore, as regulatory investigations are reportedly in progress, E*Trade’s consideration of banning Gill from the platform raises concerns about market integrity.
In other news, Australian rapper Iggy Azalea has recently revealed her plans to burn her Mother Iggy (MOTHER) tokens whenever a celebrity project is identified as a scam.
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