Robinhood to Face Class Action Suit Over Halting Meme Stock Trading

Robinhood to Face Class Action Suit Over Halting Meme Stock Trading

A U.S. District Court Judge dominated that Robinhood should undergo with a lawsuit that complains of market manipulation relating to the meme inventory rally that happened final 12 months.

U.S. District Court Judge Cecilia Altonaga from the Miami court docket has dominated that buying and selling platform Robinhood should undergo with a lawsuit associated to a number of shares from the meme inventory rally final 12 months. Robinhood should not face the claims that it carried out market manipulation when it quickly halted prospects from shopping for sure shares in early 2021.

Those shares embody GameStop and AMC, each of which had been on the coronary heart of the meme inventory frenzy that happened in 2021. Retail merchants bought the inventory in droves, main to a large enhance in worth. The buying and selling platform then restricted the buying and selling of the shares, a lot to the anger of the merchants.

Robinhood and others imposed restrictions on the shopping for of the shares, with the buying and selling platform finishing up a number of actions because it confronted a deluge of buys. The case was the beginning of a set of unfavourable headlines for the corporate which has seen its inventory worth dwindle for the reason that peak worth in August 2021.

Judge Altonaga has additionally cast aside claims from retail traders that Robinhood was negligent and breached its obligation, in addition to the declare that Robinhood conspired to put a cease to a brief squeeze. Meanwhile, the corporate says that it believes that the actions it took had been “acceptable and crucial.”

Robinhood experiencing some robust instances

Robinhood has not had essentially the most stellar 2022, with a number of notable developments happening. The platform had to minimize its workforce by 23% this quarter, whereas its crypto buying and selling unit was fined $30 million in a landmark case.

Meanwhile, there have been rumors that FTX was contemplating buying the trade. CEO Sam Bankman-Fried denied these rumors, although he himself has a 7.6% stake in Robinhood.

Still aiming to develop

While instances have been robust for Robinhood, it has been specializing in increasing its enterprise. It plans to launch a non-custodial pockets, which might pit it towards giants Coinbase and MetaMask. It additionally plans to combine U.Ok. crypto firm Ziglu, which might put together it for an growth into Europe.

Robinhood appears to be combating off the struggles it has been going through. However, the lawsuit shall be intently watched and will lead to a ruling that offers one other blow to an organization that has been attempting to decide itself again up since final 12 months.


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