Reddit user sued for securities fraud over Gamestop trading frenzy

Yahoo Finance's Jared Blikre breaks down the latest moves in Gamestop after Keith Gill, a user on WallStreetBets Reddit forum, was hit with a securities class action suit.

Video Transcript

AKIKO FUJITA: Robinhood co-founder Vlad Tenev will be front and center tomorrow on the Hill as he testifies on the issue of the Reddit trade. We've talked a lot about the huge swings that happened with GameStop. Ahead of that, though, we're getting some reports here that one of the more influential voices on that Wall Street Bets forum on Reddit has been hit with a class action lawsuit. Let's bring in Jared Blikre, who is following that story for us. Jared.

JARED BLIKRE: Right, so this would be Keith Gill, also known as Roaring Kitty. And this is a lawsuit that was just filed in Massachusetts federal court by Christian Iovin, individually and on behalf of all other similar-- similarly situated. Just reading through the filing right now, but I'll give you a couple of excerpts here. There's a quote. "Gill's deceitful and manipulative conduct not only violates numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares."

And it looks like they're alleging that he is-- because he's a licensed security professional, he shouldn't have been saying what he said. Now, I mean, you look at what's Game-- GameStop is definitely not under the same pressure it was a few weeks ago. But it is interesting, the timing of this class action lawsuit, just ahead of these hearings. You've got to imagine there's going to be a lot of lawsuits against a lot of parties here.

But I want to focus now in a couple of markets a couple of stocks that are kind of breaking down today. Now here is Apple. Despite the attention on GameStop, this is still the biggest stock in the universe. And you can see it's dipping below-- it's dipping below its 50-day moving average. In theory, we could have a head and shoulders top that's been broken, this neckline right here. So we're going to want to keep an eye on that.

Also, of Tesla. Tesla touching its 50-day moving average, but now below 800. So I think it could possibly rebound from here. It would be a false breakdown. But it could also go lower. And then finally, Peloton. Not the biggest market leader, but emblematic of the work from home trade. That is trading below its 50-day as well. Guys.