Suspected market manipulation? Retail investors' 'big brother' under investigation by US regulatory agencies

Author: Chang Jiashuai

Source: Wall Street News

After leading the meme stock movement three years ago, the leading retail investor Keith Gill returned with undiminished momentum. Recently, he even flaunted multi-billion dollar GameStop (GME) delivery orders on social media, calling on retail investors to buy in. It seems that a brand new meme stock frenzy is brewing.

But the bad news is that his trading activities have caught the attention of the regulatory authorities in Massachusetts, USA.

A spokesperson for Massachusetts Secretary of State Bill Galvin’s office told the media that the securities department is investigating Gill’s conduct, and the investigation is still ongoing.

On Sunday, Gill posted a trading screenshot on Reddit, showing that he holds 5 million shares of GME worth $115.7 million, as well as 120,000 call options with a June 21st expiration date, a strike price of $20, and a total value of $65.7 million.

On Monday, GME’s stock price closed up 20%. Intraday, a screenshot of Gill’s account showed that he had over $29.2 million in cash. As of Monday’s opening, Gill’s GME position was worth over $386 million. On Monday night, he shared another screenshot on Reddit, showing that he had not sold a single share.

It is reported that the U.S. Securities and Exchange Commission (SEC) has been reviewing bullish options related to GME when Gill posts on social media, and it is currently uncertain whether the SEC is specifically referring to the review of Gill.

In addition to regulatory agencies, there have been reports that Morgan Stanley’s brokerage firm E-Trade is considering banning Gill from using their platform for trading.

Gill did not respond to these investigations.

After the meme stock frenzy in 2021, the Massachusetts regulatory agency fined Gill’s former company, Transamerica Insurance, $4 million, accusing it of failing to properly oversee Gill. Gill had been serving as the company’s Director of Financial Wellness Education until the end of January 2021.

Under multiple unfavorable information catalysts, overnight GME stocks fell more than 5%, and rose about 2% during after-hours trading.