Robinhood to face class action lawsuit from meme stock debacle: Report

cointelegraph.com:

Cryptocurrency and stock trading platform Robinhood will allegedly face allegations of market manipulation as part of a class-action lawsuit brought by investors in “meme stocks” from nine different companies during a January 2021 rally.

According to a Thursday report from Reuters, United States District Court Judge Cecilia Altonaga of the Southern District of Florida ruled that investors in GameStop, AMC and seven other unnamed stocks — which may include Nokia and BlackBerry — could proceed with a lawsuit alleging that Robinhood artificially increased the supply of stocks. In January 2021, the price of several assets, including the meme token Dogecoin (DOGE), rose to all-time highs after Redditors on r/Wallstreetbets pumped up interest in certain stocks and cryptocurrencies.

Robinhood suspended — but later resumed — buys of GME stock and others following the assets rising exponentially, putting the trading platform in the middle of a fight between retail investors and large hedge funds shorting stocks. Thousands of users left one-star reviews for Robinhood’s app on the Google Play Store, the platform put its plans for an initial public offering in the U.S. on hold and individuals filed several class-action lawsuits alleging Robinhood was kowtowing to the interests of the involved hedge funds, given its ties to Citadel and Melvin Capital.

Today is the day that Robinhood stole from the poor to give to the rich. $GME $KOSS

Following the meme stock controversy, Robinhood was sometimes the target of U.S. lawmakers looking for answers. CEO Vlad Tenev testified before a House Financial Services Committee hearing in February 2021. Unrelated to the events around meme stocks, the New York Department of Financial Services also