LOS ANGELES (Legal Newsline) – Upset investors have filed many lawsuits against the brokerage app Robinhood regarding its decision to suspend trading during a Reddit-fueled takeover of Wall Street.
One such case was brought as a class action by lawyer Joseph Kar in Los Angeles federal court on Jan. 28. He hopes to represent everyone harmed by Robinhood’s alleged manipulation of the stock prices of Blackberry, AMC Theatres and Gamestop.
The lawsuit cites a 2016 Tweet from the company that said “Let the people trade.”
“In an effort to allay criticisms and negative publicity surrounding its business operations, on January 27-28, 2021, Robinhood decided to and did engage in unfair and improper deprivation of computer systems, transaction/trading platform, and services to its customers by disabling the ‘buy’ button on its app…” the suit says.
“Robinhood restricted, limited, or conditioned their ability to transact or trade, abruptly, purposefully, willfully, and knowing or having reason to know that the stock prices for Gamestop, AMC Theatres, Blackberry and other securities would be manipulated and would impact the open market as a result, thus causing harm to its customers, the open market, its fellow broker/dealers and firms, as well as issuers of securities.”
The lawsuit seeks various forms of compensation including civil penalties of $2,500 for each violation.