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Online brokerage platform E*Trade is reportedly considering removing GameStop (GME) meme stock trader Keith Gill, known as “Roaring Kitty,” off its platform over concerns of potential stock manipulation.
Before Gill <a href="https://cointelegraph.com/news/gamestop-crypto-memecoin-rally-can-history-repeat-itself">suddenly returned to X</a> last month — which sent shares in GameStop surging — he bought a large volume of GME options on E*Trade. Some of these expired that week and likely netted him a profit, The Wall Street Journal <a href="https://www.wsj.com/finance/regulation/e-trade-considers-kicking-meme-stock-leader-keith-gill-off-platform-f2003ec4" target="_blank" rel="noopener nofollow">reported</a> on June 3, citing people familiar with the matter.
The firm and its owner, Morgan Stanley, are concerned Gill can use his influence to pump GME for his benefit and are debating whether recent posts on X and Reddit could be considered manipulation, the sources said. 
They’re also worried removing him could draw negative attention to it and others might close their E*Trade account in solidarity with Gill. No decision has been made and the firms could decide to do nothing, the Journal reported.
On May 13, Gill — a trader cited as a major influence on the 2021 meme stock rally and GameStop <a href="https://cointelegraph.com/explained/long-and-short-positions-explained">short squeeze</a> — began cryptically posting to X for the first time in three years, sending meme stocks and <a href="https://cointelegraph.com/news/pepe-hits-all-time-high-memecoins-soar-after-famous-gamestop-stock-trader-returns">meme coins surging</a>.
Weeks later on June 2, Gill posted to Reddit for the first time since 2021 to share a screenshot apparently showing he’s <a href="https://cointelegraph.com/news/gamestop-gme-memestock-surges-keith-gill-roaring-kitty-discloses-shares">holding $181.4 million</a> worth of GME stock and <a href="https://cointelegraph.com/explained/covered-call-options-strategy">call options</a> betting that GME would be at least $20 a share on June 21.
GME rallied over 19% in Sunday night trading after Gill’s post. On Monday, June 3, it closed up 21% at $28 and climbed nearly 8.5% in after-hours trading to $30.36. <a href="https://www.google.com/finance/quote/GME:NYSE" target="_blank" rel="noopener nofollow">according</a> to Google Finance.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/6299ec9d-fbae-4bfe-b67e-368ee6f0fe19.png">
 <figcaption style="text-align: center;">
 While GME closed below its $40 opening on June 3, it still beat its Friday, May 31 close of $23.14. Source: Google Finance
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GME is up nearly 68% this year and gained over 60% since Gill returned to X.
Related <a href="https://cointelegraph.com/news/davido-meme-token-concerns-nigerian-crypto">Nigerian crypto community raises alarm over Davido meme token</a>
Gill then <a href="https://www.reddit.com/r/Superstonk/comments/1d7e4uh/gme_yolo_update_june_3_2024/" target="_blank" rel="noopener nofollow">posted</a> again to Reddit on June 3 to show he apparently holds a $33.6 million gain on his 5 million GME shares and a $51.8 million gain on his options.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/8b4e727d-065d-4375-938a-46564fbe5e8e.png">
 <figcaption style="text-align: center;">
 Gill’s June 3 Reddit post under his DeepFuckingValue account. Source: Reddit
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Gill reportedly holds several securities-industry licenses and was a registered broker with Massachusetts Mutual Life Insurance. A spokesperson told the Journal that the Massachusetts Securities Division is investigating Gill’s activities.
People familiar with the regulator's efforts told the Journal that the Securities and Exchange Commission is also reviewing GameStop call options trades around the time of Gill’s X posts. 
The report added the SEC has internally discussed whether such options trades could be considered manipulation but it wasn’t clear if it was specifically probing Gill.
An SEC spokesperson told Cointelegraph it doesn't comment on the existence or nonexistence of a possible investigation.
E*Trade, Morgan Stanley and the Massachusetts Securities Division did not immediately respond to Cointelegraph’s requests for comment.
Gill did not immediately respond to a message sent via Reddit.
Magazine: <a href="https://cointelegraph.com/magazine/meme-coins-betrayal-crypto-ideals-or-true-purpose/">Meme coins: Betrayal of crypto’s ideals… or its true purpose?</a>
Update (June 4, 3:10 am UTC): This article has been updated to add a comment from the SEC.

E-Trade mulls booting meme stock trader Roaring Kitty: WSJ

Cointelegraph

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