Keith Gill, also known as Roaring Kitty, a well-known stock trader, is facing legal issues due to his social media posts about GameStop (GME). A class-action lawsuit claims that Gill engaged in a "pump and dump" scheme, misleading investors and causing them financial losses. The lawsuit alleges that Gill failed to disclose his purchase and sale of GameStop options calls, which led to a significant surge in the stock's price.

Gill, who has been inactive on social media for two years, returned on May 13 with a series of cryptic memes, causing a 180% increase in GameStop's stock price. He later disclosed his significant position in GameStop, including 5 million shares and 120,000 call options. However, the lawsuit claims that Gill did not adequately disclose his intent to sell his options calls, leading to investor losses.

Former federal prosecutor Eric Rosen believes the lawsuit is unlikely to succeed, stating that Gill's social media posts were not explicit enough to be considered fraudulent. Rosen argues that it would be challenging to prove that Gill's posts misled investors, as they were simply memes and not explicit statements.

The lawsuit highlights the risks of social media's influence on the stock market and the potential legal consequences for individuals who use platforms to share investment information. While Gill's posts may have been innocuous, they had a significant impact on GameStop's stock price, demonstrating the power of social media in the financial world.

In conclusion, the legal action against Roaring Kitty serves as a reminder of the importance of transparency and disclosure in the financial industry. As social media continues to play a larger role in investment decisions, it is crucial for individuals to be aware of the potential legal implications of their online activities.