A recent report from the New York Times states that the stock trading platform Robinhood is facing almost 50 lawsuits directly related to the recent GameStop trading frenzy.
The New York Times reports that Robinhood, one of the most popular brokerages for online traders, is currently in talks with securities regulators and other authorities over a number of issues including last month’s major surge in shares of GameStop and Robinhood’s temporary halting buys on the stock. The company is facing almost 50 lawsuits including class action suits related to its actions against customers holding GameStop and other stocks with similar trading patterns.
In a regulatory filing on Friday, Robinhood stated that it has received information requests from federal prosecutors, the SEC, various state attorneys general, and other financial regulators over the decision to restrict trading last month on stocks including GameStop, AMC, and BlackBerry.
According to the filing, the Financial Industry Regulatory Authority (FINRA), and the SEC are also investigating Robinhood’s options trading platform and how it displays information about options trading and cash positions to its customers. Robinhood has faced criticism over how it advertises options trading after a 20-year-old man named Alexander Kearns killed himself as he thought he had incurred more than $700,000 in losses on the app. Kearns’s family has filed a wrongful-death lawsuit against Robinhood.
Robinhood is a privately-owned firm with major financial backing from several Silicon Valley giants. It also disclosed other investigations including an inquiry by FINRA into a March 2020 outage that prevented customers from accessing the firm’s trading platform at a time of major market volatility as a result of the coronavirus.
Robinhood stated that it is facing at least four potential class-action lawsuits over its disclosures about the feed it receives from other firms. In the filing, Robinhood stated that it is facing a least “46 putative class actions and three individual actions” over the trading restrictions.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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