On the evening of May 12, Keith Gill, a well-known figure in the investment and social media world, posted a cryptic but popular meme on his X account. This sparked speculation of something significant brewing. By the next morning, GameStop’s stock prices surged over 50%. This wasn’t just a fluke, especially since the stock took a sharp dive following GameStop’s disappointing earnings report and Gill’s rambling YouTube livestream affirming his unwavering belief in the company.

Keith Gill, better known as Roaring Kitty, played a key role in the 2021 meme-stock frenzy. Back then, an army of Reddit investors rallied behind him, boosting GameStop and other struggling stocks, much to the dismay of big-time investors who lost billions betting against these companies.

As Roaring Kitty, Gill became a trendsetter in the stock market, with investors paying close attention to his hinted stock picks. After a three-year hiatus, his cryptic May 12 tweet was seen by his followers as a sign to jump back into GameStop, significantly driving up the stock prices.

Gill’s return to social media was marked by a series of memes hinting at GameStop. A screenshot he posted on Reddit on June 2 revealed his GameStop holdings worth a staggering $115.7 million, along with call options valued at $65.7 million.

Despite increasing scrutiny and the potential for investigation, Gill insists he hasn’t done anything wrong. His first YouTube livestream in three years showed him standing by his previous positions on Reddit, reinforcing his belief in GameStop. However, his public disclosure of his holdings could invite legal consequences.

In 2021, Gill was called before a congressional committee for allegedly fueling the meme-stock rally. Although he wasn’t charged then, things might be different now. The Massachusetts securities regulator has confirmed an investigation into Gill’s recent activities, though they haven’t provided specifics.

The world is watching Gill closely as he faces the possibility of a formal investigation. Regulators want to know if Gill influenced the stock’s movement, affected its demand, or stands to profit from his actions.

The stakes are high as Gill’s call options expire on June 21. He’ll have to decide whether to sell his options at a profit, assuming the stock price remains high, or take delivery of the GameStop shares they represent.

Before selling, Gill must notify the market in advance about any changes in his position. While this could affect his profits, it’s a mandatory requirement under certain securities laws.

Gill’s situation raises questions about how it differs from the predictions and opinions most pundits share about stocks or CEOs advocating for their companies. The boundaries being tested here stem from the gray areas in regulations devised before the social media era.

The SEC’s approach to these unprecedented situations could set a precedent for how these regulatory challenges are addressed. Recent comments by a former SEC chair suggest the agency wants to curb extreme fluctuations in GameStop’s price to protect investments, potentially by charging individuals who breach legal boundaries through their social influence. This could serve as a warning to others not to misuse their online sway.