The Wall Street Journal reports that Morgan Stanley, parent company of E-Trade, is reportedly considering whether to ban Keith Gill, also known as "Roaring Kitty," from its platform after his recent purchases of GameStop Corp. options raised concerns about potential stock manipulation.
Gill, a pioneer of meme stocks, resurfaced online last month on X (formerly Twitter), sparking a fresh frenzy around meme stocks. A recent post on his Reddit account, DeepF-Value, showed what appeared to be significant holdings of GameStop and thousands of call options.
Shares of GameStop have surged nearly 160% since the beginning of May, prompting scrutiny over Gill's trading activity. Discussions within Morgan Stanley about how to handle Gill's account reportedly began roughly three weeks ago, but no decision has been made on a potential ban.
Before Gill's recent resurgence, there had been no activity on his X account since 2021, when he played a significant role in driving up prices of meme stocks like GameStop. E-Trade's platform reportedly crashed during the recent rally, but the cause was not attributed to trading volumes.
Morgan Stanley staff examined Gill's account and observed his purchase of call options before the rally, prompting discussions within the firm's global financial-crimes unit and with external counsel about the legality of his actions. Concerns were raised about potential backlash and user exodus if Gill's account were to be shut down.
The Securities and Exchange Commission is also reportedly reviewing recent trading activity in GameStop call options, adding to the scrutiny surrounding Gill's activities.
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