E-Trade Ponders Booting 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 its platform due to potential stock manipulation concerns.
Gill bought a large number of GME options on E*Trade before returning to X last month when GameStop’s stock price suddenly surged. The Wall Street Journal, citing sources familiar with the matter, reported that some of these may expire on June 3, potentially giving him a profit.
The company and its owner, Morgan Stanley, are concerned that Gill may use his influence to promote GME for his own benefit, and are debating whether recent posts on X and Reddit could be considered manipulation. There is, the source said.
They are also concerned that removing him could attract negative attention and lead others to close their E*Trade accounts in solidarity with Gill. No decision has been made and the companies may decide to do nothing, the Journal reported.
On May 13, Gill, who is considered a trader who has had a major impact on the 2021 meme stock rally and GameStop short squeeze, began posting cryptographically on X for the first time in three years, sending meme stocks and meme coins soaring.
A few weeks later, on June 2, Gill shared a screenshot on Reddit for the first time since 2021 showing that he owned $181.4 million worth of GME stock, and on June 21, GME was worth at least $20 per share. I posted a call option betting that .
GME rose more than 19% in Sunday night trading following Gill’s post. On Monday, June 3, it closed up 21% at $28, and in after-hours trading it was up almost 8.5% to $30.36. According to Google Finance
GME is up nearly 68% this year and is up over 60% since Gill returned to X.
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Gill then posted again on Reddit on June 3, showing that he had made a profit of $33.6 million on his 5 million shares of GME stock and a profit of $51.8 million on his options.
Gill reportedly holds multiple securities industry licenses and is a registered broker with Massachusetts Mutual Life Insurance. A spokesperson told the Journal that the Massachusetts Securities Department is investigating Gill’s activities.
People familiar with the regulator’s efforts told the Journal that the Securities and Exchange Commission (SEC) was also reviewing GameStop call options trades around the time of Gill’s X post.
The report added that the SEC discussed internally whether such options trading could be considered manipulative, but it was unclear whether it was investigating Gill specifically.
An SEC spokesperson told Cointelegraph that the SEC does not comment on possible investigations.
E*Trade, Morgan Stanley and the Massachusetts Securities Division did not immediately respond to Cointelegraph’s request for comment.
Gill did not immediately respond to a message sent via Reddit.
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Update (June 4, 3:10 a.m. UTC): This article has been updated to add comments from the SEC.
