E-Trade considers banning meme stock trader Keith Gill following GameStop surge

E-Trade, an online brokerage, is thinking about removing Keith Gill, a trader of meme stocks, from its platform. This is because they are worried about stock manipulation. Keith Gill shared on Reddit that he owned almost $116 million worth of GameStop stock over the weekend. This caused GameStop's stock to go up by 21% to $28 per share on Monday. E-Trade and its owner, Morgan Stanley, are trying to decide if they should risk upsetting Keith Gill's followers, some of whom are also GameStop investors, by kicking him out of the trading platform. After the news was released by The Wall Street Journal, GameStop shares dropped by 10%, but they still closed 21% higher for the day and continued to rise after trading hours. Keith Gill, also known as "DeepF—ingValue" on Reddit, shared another screenshot of his position on the platform’s r/Superstonk forum, indicating that he now holds a $140 million position in GameStop. GameStop shares have surged a lot in the past month, but they have cooled off since reaching $48.75 per share in the middle of May. Keith Gill played a big role in GameStop's surge in 2021, when the stock went from around $1 to as high as $120. He was fighting against institutional investors who were trying to bet against the stock. Keith Gill, known as "Roaring Kitty" on X, has over 1 million followers on the platform and is now active on it after a three-year break. He testified before Congress in 2021 about the GameStop surge and its impact on investors and hedge funds. E-Trade is discussing internally whether to ban Keith Gill, the meme stock trader who recently revealed a large position in GameStop, due to concerns about possible market manipulation. The brokerage, owned by Morgan Stanley, has not made a decision yet. GameStop shares rose after Keith Gill shared his position, holding 5 million shares of GameStop and 120,000 call options with a strike price of $20. Morgan Stanley's financial-crimes unit and external counsel are considering canceling Keith Gill's account as they monitor his activity. In May, Gill bought call options before posting on social media platform X, and some of those contracts expired that week, likely resulting in a profit. The meme stock frenzy in 2021 led to congressional hearings, including testimony by Gill, about brokers' practices in retail stock trading. Gill also faced lawsuits alleging that he misrepresented himself as a novice trader despite being a licensed professional.