The lawsuit, filed June 28 in the Eastern District of New York, accuses Gill of orchestrating a “ponzi scheme” through a series of social media posts starting May 13. The lawsuit alleges that Gill misled investors by failing to disclose sufficient information about the purchase and sale of GameStop option calls, causing losses for some investors.

Plaintiff Martin Radev, representing the Pomerantz law firm, stated that he suffered losses from the alleged “ponzi game” after purchasing a total of 25 GME shares and 3 option calls starting in mid-May. Gill broke her two-year social media silence on May 13, posting a series of cryptic memes to her X account.

This caused GameStop’s stock price to increase by 180%, rising from $17.46 to $48.75 at the close on May 14. In a post on Reddit on June 2, Gill disclosed that he had a significant position in GameStop, including 5 million shares of GME and 120,000 GME option calls with an expiration date of June 21, 2024.

This statement caused the GME price to rise once again, with the share price rising above $45 within the day. On June 13, Gill announced that he had exercised all of these option calls and made millions of dollars in profits. He is known to have used his earnings to buy more GameStop shares.

The lawsuit states that Gill did not adequately disclose his intention to sell option calls in advance, which misled his followers and other market participants, causing investors to suffer losses.

Former federal prosecutor Eric Rosen said in a June 30 blog post that the class-action petition was “doomed from start to finish” and could have easily been dismissed had Gill filed a “well-prepared” motion to dismiss.

Rosen stated that Gill’s argument that he should have announced his intention to sell his options would not hold up in court because it was not reasonable to expect a “reasonable investor” to hold all of his options until their maturity dates.

Secondly, he said that it would be difficult for the plaintiff to prove his status as a “reasonable investor” before the court, as he sought to profit from the impact of Gill’s

“It is irrational to invest just because of harmless tweets shared on social media by a person with the nickname Roaring Kitty.”

The most important element in a fraud case is proving that the fraudster blatantly lied or intentionally misled investors by failing to disclose important information, Rosen said.

He explained that a series of random memes someone shared on social media under the name “Roaring Kitty” were not claims containing information that could be proven true or false, and would be incredibly difficult to get past a judge.