The filing did not include any information regarding the settlement, and Robinhood, its counsel, and the investors’ counsel did not respond to inquiries for comment.
In 2021, investors sued Robinhood, the popular trading site, for blocking the trade of several meme stocks, including GameStop. The parties are now completing a settlement.
The deal with the group of investors is likely to be completed and dismissed within the next two weeks, according to a filing in a Miami federal court on May 28. Robinhood’s attorneys have indicated as much.
The filing did not include any information regarding the settlement, and Robinhood, its counsel, and the investors’ counsel did not respond to inquiries for comment.
Plaintiff Blue Laine-Beveridge was the leader of the group of investors who claimed that Robinhood “unlawfully manipulated market prices” and caused “tens of billions of dollars of investors’ equity” damages by limiting the stocks its customers could purchase from January 28 to February 4, 2021.
Many companies’ stock prices dropped, including GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc., and Tootsie Roll.
The company’s management of meme stocks is the subject of a larger legal case in many U.S. states, and this particular complaint claims that Robinhood has violated securities laws.
The investors’ April 19 attempt to submit a fresh application for class certification was denied by United States District Judge Cecilia Altonaga, leading to the settlement.
The November of the prior year had seen a similar plea turned down. Retail investors often trade meme stocks like GameStop and AMC based on social media excitement, thus the moniker.
In January 2021, there was a “short squeeze” that caused GameStop’s stock to spike significantly, leading to huge losses for hedge funds and short sellers and huge profits for certain individual traders.
Keith Gill, better known by his stage name “Roaring Kitty,” who had been absent from social networking site X for over three years, had a triumphant comeback in May, considerably contributing to the spike in GameStop’s stock price.
According to Google Finance, GME’s stock reached a new high of $48.75 on May 14—its best since late 2021—as a result of enthusiastic traders and his mysterious postings.
GameStop’s stock has since experienced a substantial decline, concluding at $21.24 on May 29, a nearly 11% decrease, with an additional 2% decline in after-hours trading to $20.78.
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