LOS ANGELES (Legal Newsline) – A federal judge has refused to impose an all-trades-all-the-time restraining order against the stock-trading app Robinhood in one of the many lawsuits recently filed against it.
Judge Virginia Phillips, in Los Angeles, denied the motion for a temporary restraining order filed by plaintiff Levi Cobos and attorney Joseph Kar. Their class action lawsuit aims to represent everyone harmed by Robinhood’s alleged manipulation of stock prices of Blackberry, AMC Theatres and Gamestop.
A wave of litigation followed Robinhood’s decision to stop letting users buy shares in those companies during a Reddit-fueled takeover of Wall Street in late January.
Phillips expressed skepticism that Cobos’ claims will prevail as his lawsuit goes forward when she denied the TRO on Feb. 10.
“Plaintiff does not dispute that he could have purchased stocks on another platform regardless of any challenges that he may have faced in doing so,” Phillips wrote.
“In addition to the standing deficiencies, Plaintiff has failed to show that Robinhood had a specific intent or purpose to induce others to trade in a security; to the contrary, Robinhood prevented the purchases in certain securities.”
The motion for TRO asked that Robinhood be prevented from restricting trade on its app.
“Plaintiff’s alleged irreparable harm, although not clearly pled, appears to be based on an unpredictable interference with his ability to purchase certain stocks on the Robinhood App,” Phillips wrote.
“As Robinhood notes, this harm is speculative; Plaintiff has not provided any evidence to suggest that such interference would happen again, when it might happen, or whether Plaintiff would be affected by such interference.
“Moreover, as Plaintiff acknowledges, he can always elect to purchase his desired stocks on other platforms and thus avoid any interferences on the Robinhood App.”
Robinhood on Feb. 5 ceased the conduct at the center of these lawsuits. It said on its website that it limited buying in volatile securities to make sure it complied with deposit regulations.