Robinhood Markets is back in the news and not for a good reason. The Stock and Crypto trading platform Needs to face market manipulation claims over restrictions it placed on trading during 2021’s “meme stock” rally, a U.S. judge ruled on Thursday.
Robinhood has had a tough last year. Their stock price has been plummeting and Robinhood even had to fire 9% of Full Time Employees in a recent report. Co-found Vlad Tenev states, “While the decision to undertake this action wasn’t easy, it is a deliberate step to ensure we are able to continue delivering on our strategic goals and furthering our mission to democratize finance.” Tenev reassured the public that they would be contacting each laid-off employee individually to help them decide their next plans, find new jobs and help with offer separation plans.
Last week “U.S. District Court Judge Cecilia Altonaga in Miami ruled that investors in nine stocks may proceed with a class action lawsuit against Robinhood. The stocks involved in the manipulation claims included GameStop Corp (GME.N), AMC Entertainment Holdings Inc (AMC.N), and other unusual stocks. These stocks allege that the restrictions artificially increased the stocks’ supply.” (Source Reuters)
Robinhood has been facing angry retail investors since they took away the buy button during the initial meme stock frenzy last year. The trading platform which is supposed to fully support retail investors is now looked at as one of the biggest enemies to the everyday investors. Now they might be facing bigger issues since this is going to likely move to the court rooms next.
Retuers said that: Robinhood’s associate general counsel of litigation and regulatory enforcement, Cheryl Crumpton, said “the company continues to stand by its actions, which it believes were “appropriate and necessary to support our customers.”
Do you think justice will be served? Or do you think that Robinhood did nothing wrong at all!?