Inventory buying and selling platform Robinhood Markets should face market manipulation claims over restrictions it positioned on buying and selling throughout final 12 months’s “meme inventory” rally, a US choose has dominated.
US District Courtroom Choose Cecilia Altonaga in Miami stated 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 among a number of circumstances introduced towards the retail buying and selling platform after it quickly barred prospects from shopping for sure sizzling shares in January 2021, together with GameStop and AMC.
Shares of these corporations surged to excessive highs because of a social media-fueled rally that finally led Robinhood and others to limit buying and selling within the affected securities, infuriating retail traders and rattling market confidence. The volatility brought about main losses for hedge funds that had wager towards the meme shares.
In a press release, Robinhood’s affiliate normal counsel of litigation and regulatory enforcement, Cheryl Crumpton, stated the corporate continues to face by its actions, which it believes had been “applicable and essential to help our prospects.”
“The court docket 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 stated.