Keith Gill, known for his involvement in the notable GameStop short squeeze of 2021, faces securities fraud allegations in a class-action lawsuit. The lawsuit centers on a series of social media posts by Gill in May and June, which allegedly influenced significant fluctuations in GameStop's stock price.

Filed on June 28 in the United States District Court for the Eastern District of New York, the class-action lawsuit accuses Gill of orchestrating a "pump and dump" scheme through his social media activities starting May 13. The plaintiff, Martin Radev, represented by Pomerantz LLP, claims he suffered losses after investing in GameStop shares and call options in mid-May, allegedly misled by Gill's posts.

The lawsuit argues that Gill failed to disclose his plans to sell his options beforehand, which purportedly influenced his followers and other market participants, resulting in financial losses.

Gill broke his two-year social media silence on May 13 with a series of ambiguous posts. These posts triggered a significant surge in GameStop's stock price, soaring from $17.46 to $48.75 by the close of trading on May 14. Subsequent posts by Gill, revealing a substantial GameStop holding and plans to reinvest profits, further drove up the stock's value.

However, former federal prosecutor Eric Rosen believes the lawsuit may not succeed. In a blog post on June 30, Rosen suggests that the claims are unlikely to prevail in court, noting it unreasonable to expect Gill to hold onto his options until expiration. He also questions the plaintiff's strategy of basing the lawsuit on the impact of Gill's social media posts on stock prices, emphasizing the difficulty in proving fraud based on memes and online commentary.