Robinhood, a stock trading app that was once popular with millennials, is facing yet another class action lawsuit after it recently temporarily suspended the purchase of GameStop and other “memes” through the platform.

The lawsuit, filed January 29 in Houston, Texas, alleges that Robinhood, along with other defendants, including TD Ameritrade and WeBull, came to “a common understanding of what to do that they deliberately implemented in parallel.”

Intentional parallelism in competition law refers to behavior in which competitors in an oligopoly set prices or conditions without formal agreement. One business will determine the price and others will follow, as deviations from this behavior can threaten market share and reduce profits.

In short, the situation that was beginning to unfold posed a threat to the traditional players in the financial industry, many of whom were the main clients of the defendants, and should not be allowed to happen.
Robinhood and several other trading platforms have suspended trading on a number of stocks aimed at a group buying strategy from audience sources.

This was originally suggested by the r / Wallstreetbet subreddit in response to some hedge funds taking short positions on GameStop in excess of available stocks.

The strategy included a short lobbying campaign, “punishing hedge funds in the end, and redirecting a significant portion of their funds to individual investors.”

The lawsuit alleges that the defendants’ actions to stop trading on GameStop and other promotions deprived their customers of the opportunity to take advantage of volatility and actively manipulated the stock price.

Robinhood is accused of violating customer contracts, violating management responsibilities and violating anti-competitive practices and pricing laws.

The company did not immediately respond to Cointelegraph’s request for comment.

A previous class action lawsuit filed in Manhattan on January 28 contained similar claims. Disgruntled users can automatically sue through the online consumer protection platform DoNotPay.

Outrage at Robinhood’s actions angered Democratic Party spokeswoman Alexandru Ocasio-Cortez, and she is said to have abandoned plans to release the information after a public relations failure.

Even Hollywood studio Metro-Goldwyn-Mayer felt the disaster deserved a long series and quickly won the film rights.

Source: CoinTelegraph

LEAVE A REPLY