Naperville Lawyer Files Lawsuit Against Robinhood

Naperville IL

29 January, 2021

12:15 PM

Description

NAPERVILLE, IL — A Naperville-based lawyer is suing Robinhood after the platform restricted the trading of GameStop, AMC Theaters, Blackberry and other stocks, according to Chicago Tribune. The restriction comes after Reddit-based investors increased the value of these stocks, which were being short sold by other investors. The federal lawsuit states that attorney Richard Gatz owned stock in Blackberry prior to Robinhood's newly imposed restrictions. After Robinhood halted trading on Blackberry and other stocks Thursday, Gatz's two options contracts for Blackberry (BB) fell by nearly 200 percent, the lawsuit alleges. The complaint states, "On information and belief, the halting of trading of these stocks was to protect institutional investment at the detriment of retail customers," suggesting that Robinhood intentionally shut out small-scale investors to protect large-scale investors. The complaint continues, "The halt of retail trading for these stocks has caused irreparable harm and will continue to do so. Plaintiff is unable to get fair market value for his options contracts and the manipulation has caused the price of the BB to fall. If the stocks are not allowed to be trading it is likely that Plaintiff will take a financial loss solely due to the Defendant's behavior and manipulation of their trading platform." Robinhood's restrictions were put in place a day after several stocks saw a surge when individual investors began trading them, thwarting hedge funds that had been short selling the underperforming stocks. Robinhood also faced scrutiny in June 2020 when a Naperville-based trader committed suicide after seeing a six-figure negative balance on his Robinhood account. More via Chicago Tribune