TBA Law Blog


Posted by: Kate Prince on Jan 29, 2021

A class-action lawsuit has been filed against the stock trading app Robinhood, almost immediately after it began restricting the trading of certain stocks, The Hill reports. Robinhood blocked its users’ ability to acquire new shares of stocks in companies including GameStop, AMC and BlackBerry. Prior to the restrictions, those stocks had been made popular by a Reddit forum that caused “unprecedented stock rise.” The suit was filed in the Southern District of New York and it claims the app “purposefully, willfully, and knowingly,” removed GameStop from the trading platform, which “deprived retail investors of the ability to invest in the open-market and manipulating the open-market.” Users on the Reddit forum had worked together to drive up the price of stocks that traditional hedge funds had shorted, which sent GameStop stock soaring more than 1,000% over the past several weeks.