January 28, 2021 Wallstreetbets Reddit thread news
A Robinhood user filed a class motion lawsuit against the system on Thursday following it limited buying and selling of GameStop (GME) stock — which has soared in current months thanks to the assist of Reddit traders — causing it to get rid of a great deal of its benefit currently.
The grievance alleges that Robinhood’s motion deprived buyers of getting gain of probable gains as GameStop’s inventory rose afterwards in the working day, as properly as generating it extremely hard for them to “short” the inventory in situation it drops. It also alleges that Robinhood consumers have endured “substantial losses” mainly because of the shift, and claims the trading platform violated Economical Field Regulatory Authority guidelines by denying consumers the possibility to trade the stock.
“Upon information and facts and belief, Robinhood’s steps had been accomplished purposefully and knowingly to manipulate the current market for the profit of people and economical institutions who have been not Robinhood’s clients,” the grievance, submitted by Brendon Nelson, alleges.
Robinhood explained in a statement Thursday that, “in light of current volatility, we are restricting transactions for certain securities to situation closing only.”
The enterprise took very similar steps for other stocks, like AMC (AMC), BlackBerry (BB), Nokia (NOK) and other folks, a little something the suit also can take concern with.
“Robinhood carries on to randomly pull other securities from its app for no legitimate explanation,” the complaint states.