A decide allowed traders in GameStop, AMC Leisure Holdings and 7 different shares to proceed with a proposed class-action lawsuit towards Robinhood.
REUTERS
Inventory buying and selling platform Robinhood Markets should face market manipulation claims over restrictions it positioned on buying and selling throughout final yr’s “meme inventory” rally, a US decide has dominated.
US District Court docket Decide Cecilia Altonaga in Miami mentioned within the ruling that traders in GameStop, AMC Leisure Holdings and 7 different shares can proceed with a proposed class-action lawsuit alleging the restrictions artificially elevated the shares’ provide.
The lawsuit was one in every of a number of circumstances introduced towards the retail buying and selling platform after it briefly barred prospects from shopping for sure scorching shares in January 2021, together with GameStop and AMC.
Shares of these corporations surged to excessive highs due to a social media-fueled rally that ultimately led Robinhood and others to limit buying and selling within the affected securities, infuriating retail traders and rattling market confidence. The volatility brought on main losses for hedge funds that had guess towards the meme shares.
In an announcement, Robinhood’s affiliate basic counsel of litigation and regulatory enforcement, Cheryl Crumpton, mentioned the corporate continues to face by its actions, which it believes have been “applicable and essential to assist our prospects.”
“The courtroom has not but made any findings of truth or dominated on the deserves — and we are going to proceed to vigorously defend ourselves on this matter,” Crumpton mentioned.
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