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‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

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Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#31

Post by newacct583 »

emteycz wrote: post #21
newacct583 wrote: post #17

Earlier quoted context omitted.

Indeed, there's no meat to the suit detailed. Still, though. The fact that DeepFuckingValue just turns out to have been a licensed broker complicates the narrative quite a bit. Needless to say he can be expected to have known that the whole short trading theory of "Hold the Line" was bunk, and did nothing to disabuse the community of it. I say it every time this comes up: this guy's criminal exposure is really signif…

DFV never said a thing about short squeezing. Watch his content, don't trust the media. He bought the stock as a long term investment because he thought it's severely undervalued and it will rise with new leadership.

> DFV never said a think about short squeezing.

But did Keith Gill?

All the argument here tends to treat "/u/DeepFuckingValue" as the sole authority of what this guy did, and in context that seems outrageously naive.

Accounts all over WSB were pushing this stock like crazy, and this guys Just So Happens to have been a huge beneficiary, when he was absolutely expert enough to have understood the bubble (and importantly, how the bubble was driven by the WSB community misunderstanding short trading)?

Again, his expertise and the incentives just don't line up here. That's not proof, but it's pretty good justification for suspicion. Occam's favorite explanation has to be that this guy ran a pump and dump.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#32

Post by jaybeeayyy »

gruez wrote: post #22
outoftheabyss wrote: post #12

I find it nauseating seeing the financial press, politicians and big time players claiming that their actions and ‘concern’ is based on not wanting retail investors to lose money as a stock peaks. Be honest, you don’t give a shit and even if this was your motivation, people have autonomy in the markets, although sometimes naive, they know the risks. Stop treating retail investors as children that need saving when in…

>people have autonomy in the markets, although sometimes naive, they know the risks. Why? Because they ticked the "I'm an experienced options trader" box? This guy did, but clearly didn't understand how options worked. https://news.ycombinator.com/item?id=23523246

Most financial advisors, like this person, do not day trade and certainly don't mess with options. Aside from the risks involved, I think you'd have a hell of a hard time finding insurance for your firm if that was the case. No one wants to be stuck by themselves when they fat-finger an extra zero and lose someone else's $50k.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#33

Post by Animats »

xiphias2 wrote: post #8
brianwawok wrote: post #5

Earlier quoted context omitted.

Who in 2021 thought naked calls are a good idea?

A lot of people who think that buying puts is ,,too expensive''. Nassim Taleb made money by understanding that out of money call options were underpriced, not overpriced how people think generally. People don't learn from the past.

Taleb made money in 2008 by buying options that were way out of the money and hoping for a crash. All other years, his fund lost money. That strategy would have lost money over the last decade, because there wasn't a crash.

Whether that strategy is a net win over a business cycle isn't known. Taleb's funds never published their full results.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#35

Post by collias »

julienfr112 wrote: post #26
belltaco wrote: post #10

Earlier quoted context omitted.

Selling naked call options on a meme stock no less(assuming he sold them after the Reddit hype train started). Also selling 200k worth meant he would have made it out like a bandit if the bet succeeded. I wonder what his net worth is if the broker allowed him to be leveraged so much?

there is max fixed gain when selling a call, right ?

Yes, your max gain is whatever premium you collect from the sale.

Your max loss is infinite, as the plaintiff has now discovered.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#36

Post by silexia »

dilippkumar wrote: post #18
collias wrote: post #3

"The would-be plaintiff representing investors in the case, Christian Iovin of Washington state, sold $200,000 worth of call options on GameStop shares when the stock was below $100. The stock quickly eclipsed $400 a share, forcing him to buy the calls back at elevated prices." He's being sued by someone who sold naked call options and got burned. This case is going nowhere. I'd love to start suing people for every t…

> “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 said. “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.” As a re…

I have seen a lot of protests defending Gill.

I think there is another side to the story though with many people who lost money buying the stock (selling options is different) based on his advice. Gill is held to a much higher standard than a normal person as he is a licensed security broker.

If you look at my comment history on HN, you will see at the time I was pointing out a lot of Redditors were engaging in a pump and dump scheme. Pump and dumps are illegal and regulated by the SEC. If Gill, a licensed security broker, is found to have been a part of this he could end up losing.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#37

Post by JumpCrisscross »

ra7 wrote: post #20
sixQuarks wrote: post #14

Earlier quoted context omitted.

I wouldn’t be so sure. Yes it’s ridiculous to sue after doing something so stupid, however if it’s true that he’s a registered financial advisor, he may not get out of this Scott free.

He wasn't giving advice as a registered financial advisor though. I don't think anybody even knew he was one until WSJ published a piece on him. How does this hold up in courts?

> How does this hold up in courts?

Surprised they went for the courts instead of arbitration. Securities arbitration is notoriously biased towards the client. And even an allegation makes it onto the individual’s permanent regulatory record.

Smells like a PR stunt.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#38

Post by emteycz »

woeirua wrote: post #28

I doubt this lawsuit is going anywhere, but I wouldn't be surprised at all if this guy ends up in front of a judge at some point down the road. I really question his decision to come forward. Don't see what it gained him aside from the adulation of thousands of bots on r/WSB.

He didn't "come forward", other Reddit users made him their god (especially the 6 million new users of the sub), he was just posting his positions and commentary so others could learn. He became famous because he was in it long before anyone else and thus his gains got big.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#39

Post by JumpCrisscross »

snicksnak wrote: post #29

Why is he always referred to as 'Roaring Kitty' from youtube when he is undoubtedly better known as DeepFuckingValue from reddit? Because of the `F-Word`? It will be interesting how congress will refer to him during the hearings, considering that reddit also has to appear and not youtube, so his alter ego DeepFuckingValue should be in focus?

> Why is he always referred to as 'Roaring Kitty' from youtube when he is undoubtedly better known as DeepFuckingValue from reddit?

Makes sense for this case. Public messaging versus publicly visible but arguably private conversation.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#40

Post by superfrank »

newacct583 wrote: post #17
collias wrote: post #3

"The would-be plaintiff representing investors in the case, Christian Iovin of Washington state, sold $200,000 worth of call options on GameStop shares when the stock was below $100. The stock quickly eclipsed $400 a share, forcing him to buy the calls back at elevated prices." He's being sued by someone who sold naked call options and got burned. This case is going nowhere. I'd love to start suing people for every t…

Indeed, there's no meat to the suit detailed. Still, though. The fact that DeepFuckingValue just turns out to have been a licensed broker complicates the narrative quite a bit. Needless to say he can be expected to have known that the whole short trading theory of "Hold the Line" was bunk, and did nothing to disabuse the community of it. I say it every time this comes up: this guy's criminal exposure is really signif…

I posted an eerily similar comment to this on Reddit.

Yeah, the suit is BS, but the fact that he's a licensed broker really shifts the narrative a bit and makes you start to question things. It's no longer "Johnny Everyman finds Picasso painting at yard sale", it's now "Museum curator finds Picasso painting at yard sale".

I've been an active member of WSB for more than 5 years now and I've followed this story since the beginning. Based on his YouTube channel and some other things, I still think DFV is just a dude who stuck to his convictions and got insanely lucky, but I'm less certain of that than I was last week.

I don't think this suit will go anywhere, but I wouldn't be surprised theres a few twists left in this story.

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