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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

#51

Post by koolba »

Animats wrote: post #33
xiphias2 wrote: post #8

Earlier quoted context omitted.

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.

You don’t count the 30% drop last March as a crash?

It doesn’t matter if it bounces back later that year. Any puts near those levels would have cost peanuts and paid handsomely.

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

#52

Post by anm89 »

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…

While big players systematically game things to put retail at a disadvantage every day and nobody complains.

They are only taking action because they have an easy target they can score some political points on and who won't fight back

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

#53

Post by shin_lao »

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…

I agree with your "can't sue over loss of trading", but that's not to me the problem.

If he is a professional, Gill is in trouble. When I was working in capital markets, my contract stipulated that I had to disclose any trading activity to my employer. That's because, for example, I could be using insider information to conduct some trades privately, which is unethical and illegal. Or I could bet against the bank. Etc. I can't remember how many trainings I had regarding what I could do and not do in terms of trading privately.

Pretty sure that teasing masses on Reddit would have had me fired.

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

#54

Post by Judgmentality »

newacct583 wrote: post #44
sokoloff wrote: post #23

Earlier quoted context omitted.

Is the assertion that DFV, by being a licensed broker, is obligated to speak on a web forum to correct misinformation that they see there?

Of course he wasn't "obligated". But the guy was (1) a legitimate expert on the details of how his trading worked and (2) spoke profusely and at length about all the other details of his investments. He wasn't silent. At all. Yet he was silent as his investment conveniently went through the roof, driven by a huge misunderstanding propagated within the very community where he did almost all his profuse speaking. And t…

You should really go look at his YouTube, Twitter, and reddit history - because what you're saying is wrong.

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

#55

Post by LargeWu »

silexia wrote: post #36
dilippkumar wrote: post #18

Earlier quoted context omitted.

> “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 pum…

Don't Pump and Dump schemes generally involve baselessly promoting a stock with the private intention of raising its price artificially? This whole sequence of events seemed like they were pretty transparent about what they were trying to accomplish based on publicly available information.

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

#56

Post by Animats »

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…

Here are the rules for registered investment advisors.[1]

This was a pump and dump. Those have been around since at least the 19th century. Older ones involved newspapers and newsletters. Newer ones involve social media. The SEC fines people for this regularly. This time, the suckers were people who hadn't seen this a few dozen times yet.

[1] https://www.sec.gov/divisions/investment/iaregulation/memoia...

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

#57

Post by viklove »

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.

Someone else said it, but he didn't "come forward." He's been posting about his GME position on WSB and his YouTube channel since 2019. You can literally go and watch the videos yourself. This is just an investor who enjoys sharing his due diligence with other investors, who ended up being absolutely right (and going viral because of it).

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

#58

Post by perennate »

silexia wrote: post #36
dilippkumar wrote: post #18

Earlier quoted context omitted.

> “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 pum…

His comments about the company's value were about the fundamentals and, to a very limited extent, about a possible short squeeze: https://www.youtube.com/watch?v=alntJzg0Um4

And at most it seems he was giving his opinion about the company. He never said something like "everyone should buy GameStop because it's guaranteed to rise in value".

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

#60

Post by compiler-guy »

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?

If you have a license, you have responsibilities as defined by the regulations involved, regardless of whether the people you interact with know you have those responsibilities or not.
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