A Robinhood user filed a course action lawsuit in opposition to the system on Thursday immediately after it limited investing of GameStop (GME) inventory — which has soared in recent months thanks to the guidance of Reddit traders — causing it to drop significantly of its worth these days.
The grievance alleges that Robinhood’s action deprived buyers of taking gain of opportunity gains as GameStop’s stock rose afterwards in the working day, as perfectly as creating it not possible for them to “short” the stock in circumstance it drops. It also alleges that Robinhood prospects have endured “substantial losses” mainly because of the move, and claims the buying and selling platform violated Economical Sector Regulatory Authority guidelines by denying customers the opportunity to trade the inventory.
“Upon details and belief, Robinhood’s actions had been carried out purposefully and knowingly to manipulate the sector for the reward of persons and economical institutions who have been not Robinhood’s shoppers,” the grievance, filed by Brendon Nelson, alleges.
Robinhood stated in a statement Thursday that, “in light of current volatility, we are restricting transactions for sure securities to position closing only.”
“Robinhood proceeds to randomly pull other securities from its app for no legit explanation,” the grievance states.