Robinhood To Face US Market Manipulation Claims Over “Meme Stock” Rally : Reuters Report
TL;DR
- According to a U.S judge, the stock trading platform Robinhood Markets Inc should face market manipulation claims.
- This lawsuit was one of many brought against the platform after it temporarily barred customers from purchasing stocks back in Jan 2021, such as GameStop and AMC.
- Robinhood prices surged in May after the CEO of FTX SBF announced that he had purchased stake in the company.
Robinhood Judge Rules That Robinhood Should Face Market Manipulation Claims
According to Reuters, a U.S Judge ruled on Thursday that stock trading platform Robinhood Markets Inc should face market manipulation claims.
Judge Cecilia Altonaga said in the ruling that investors in GameStop Corp (GME), AMC Entertainment Holdings INC (AMC), and seven other stocks could proceed with the proposed class action lawsuit.
This lawsuit comes after retail trading company Robinhood temporarily barred customers from buying certain stocks in January 2021.
The “meme stock rally” was mainly social media-fueled, and the shares of the companies mentioned were involved in a short squeeze that led Robinhood and other trading platforms to restrict retail trading.
Attorneys for Robinhood did not reply to a request for comment.
Robinhood Stocks Soared after SBF Confirmed he had Stake in company
Robinhood stock prices surged earlier in May of this year after the CEO of crypto exchange FTX Sam Bankman-Fried announced he had purchased a 7.6% stake in the company.
According to the filing, SBF paid a total of $648 million to acquire a 7.6% stake in Robinhood.
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