The Roaring Kitty Controversy: ETrade's Potential Ban Sparks Backlash Among the Online Community

The online community criticised ETrade for working under external influence to slow down the democratisation of the stock market.

Image: Keith Gill on his Roaring Kitty podcast

On Monday, the Wall Street Journal was the subject of much controversy in the financial space. Morgan Stanley-owned ETrade may be preparing to ban Keith Gill, also known as Roaring Kitty.

The famous trader from 2021’s GameStop shares short squeeze has returned to the centre of attention by reappearing on social media after declining to trade for three consecutive years. ETrade's potential ban brought backlash over X (previously Twitter) and demanded a boycott.

In today’s social media world, a giant social media platform like X has a ripple effect that tremendously impacts all the surrounding sites. Gill is mainly known for manipulating the financial markets by involving his followers and friends. His posts have seen the share prices for the often margin-called GameStop skyrocket and put immense pressure on numerous institutional short-sellers. His posts have again pushed the cost of GameStop up to double and instigated meme stock trading, which is a clear indication that he has continued to influence the market.

Even if ETrade ultimately decides to ban Gill–a decision that might happen because of his public criticism of the company–the approach has incited many individual traders and raised many questions regarding the fairness and legitimacy of market practices among large trading platforms. A similar approach annoyed the general public in 2021 when Robinhood prevented unprecedented trading on popular stocks like GameStop.

Many users of platforms where Gill actively comments under the name RoaringKitty have voiced their disapproval of ETrade’s actions. Many have provided screenshots of their messages to ETrade support to block them and close their accounts. Although these images might not be verified, they depict people's mistrust and irritation towards traditional financial systems seen as intermediaries.

Within minutes of his returning post, Gill shared news of an increase in the value of Pepe and Doge meme coins by over 5%, showing that his social media pages can impact the markets.

The online community went further to criticise ETrade, claiming that they are working under some external influence, perhaps from Wall Street gurus, policy-makers, or other influential stakeholders, to slow down the democratisation of the stock market and the enabling of the ordinary investor.

“It would be quite silly for E-Trade to ban someone for being a literal stock market influencer because they told people what stocks they bought.

Isn’t this literally the entirety of CNBC’s programming?” a comment by X user Dare Obasanjo read.

Keith Gill’s case raises many questions about how far and in what ways regulators must safeguard market integrity and prevent particular investors from monopolising markets. His recent activities, such as the share visualisation of buying tens of millions of dollars worth of GameStop shares and call options for ETrade and sharing them on Reddit, have caused stock prices to change and brought the spotlight back to the social media trading community.

Some critics responding to the allegations of market manipulation against Gill have pointed out that if his actions fall within this category, the ‘eating recommendations from cooking shows should also be banned’. This concern is linked with other important questions about the admissibility of market manipulation and the role of social media in such processes as forming investors’ sentiments and trends on the stock market.