Investors Say Robinhood Has No Grounds To Dismiss MDL Over ‘Meme Stock’ Class Action

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Robinhood Investor Meme Stock Class Action Lawsuit Overview: 

• Who: Robinhood investors argued the multidistrict litigation of a class action lawsuit filed against the company should not be dismissed.
• Why: Investors claim they successfully alleged an antitrust conspiracy against Robinhood and other securities trading companies over “meme stock” transactions in January.
• Where: The class action lawsuit is being heard in Florida federal court.

Robinhood investors claim they successfully alleged an antitrust conspiracy against it and other securities trading companies they accused of colluding to freeze “meme stock” transactions back in January. 

The investors words were directed at a Florida judge after Robinhood sought to dismiss the multi district litigation of a class action lawsuit alleging it — along with E*Trade Securities LLC and Interactive Brokers LLC — engaged in anti-competitive practices by working together to block the purchase of certain stocks as their prices inflated. 

More than 50 class action lawsuits were lodged against the companies in April and subsequently divided by the US. Judicial Panel on Multidistrict Litigation into four different tranches: state law claims against Robinhood, state law claims against separate brokers, antitrust claims, and federal securities law claims, reports Law360. 

Robinhood Investors Say Firms Colluded to Cut Losses on Meme Stocks

Robinhood colluded with investment firms to block purchases of “meme stocks” the firms had previously bet against, in order to give the companies time to sell their shares and avoid big losses, say investors. The meme stocks’ prices were being inflated by a community of Redditt users engaged in a coordinating buying spree. 

Investors say that, regardless of whether or not the involved companies agree with the characterization of their actions, the allegations made were plausible, and that it is too early for the case to be dismissed either way. 

“Defendants claim that the (class action lawsuit) fails to set forth an antitrust violation either under the per se rule or the rule of reason,” say investors. “Here too Defendants’ arguments fail. The determination of whether the per se test applies is premature at the pleading stage.”

Investors say they have emails sent between executives at investment firms and trading platforms discussing their plans to make “an unprecedented move,” by stopping shareholders from being able to buy “meme stocks,” such as Gamestop Inc. and AMC Entertainment Holdings Inc. 

“Defendants explicitly agreed to restrict the purchase of the Relevant Securities. Such direct evidence establishes a per se violation of the Sherman Act, and the Court need not draw any further inferences,” investors say. 

Were you a Robinhood investor stopped from purchasing “meme stocks” this year? Let us know in the comments! 

The investors are represented by Joseph R. Saveri, Steven N. Williams, Christopher K.L. Young, and Anupama K. Reddy of Joseph Saveri Law Firm LLP, and Frank R. Schirripa, Kathryn Hettler, Seth Pavsner, and Eugene Zaydfudim of Hach Rose Schirripa & Cheverie LLP. 

The Robinhood Meme Stock Class Action Lawsuit is In Re: January 2021 Short Squeeze Trading Litigation, Case No. 1:21-md-02989, in the U.S. District Court for the Southern District of Florida.

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