A surge in GameStop shares came about due to a Reddit push that resulted in stock prices rising to $347.51 (£247.81) from under $100 (£71.31) in less than a week. A group of investment enthusiasts, mostly from the subreddit page r/WallStreetBets, identified that some hedge funds held large short-selling positions on GameStop, and bought up all the available shares.
News has since broken that the saga is reportedly being turned into a movie by film company MGM and writer Ben Mezrich. Other news revealed that those deemed responsible were being taken to court by US law firm Hagens Berman.
Hagens Berman have called on Keith Gill, MML Investors Services (by whom he was allegedly licensed at the time), and Massachusetts Mutual Life Insurance Company to participate in the lawsuit, after singling him out as one of the more influential parties in the r/WallStreetBets subreddit.
The suit argues that both organisations had “legal and regulatory obligations to supervise Gill to prevent this very conduct” due to his alleged links to them both.
“Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares,” the suit states.
“He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”
Gill has responded in a prepared testimony, according to gamesindustry.biz, saying “The idea that I used social media to promote GameStop stock to unwitting investors is preposterous.
“I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel.”