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Robinhood Nears Settlement with Investors Over 2021 Trading Halt

Robinhood

Investors who sued Robinhood for stopping the trade of several popular stocks in 2021, including GameStop, are seeking to complete a deal with them.

In a May 28 filing to a Miami federal court, Robinhood’s attorneys claimed that it is “in the process of finalizing the settlement” with the group of investors and expects settlement and dismissal in the next two weeks.

Settlement and Market Manipulation Claims

The settlement’s specifics were omitted from the file. Robinhood, its lawyers, and the investor group did not immediately respond to requests for comments.

By “picking and choosing” what stocks its customers may buy between Jan. 28, 2021, the investors—including main plaintiff Blue Laine-Beveridge—alluded to Robinhood as having “unlawfully manipulated market prices” and “wiped out tens of billions of investors’ equity.”

Affected by Robinhood’s activity, the investors claimed they owned shares in GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, Trivago, Koss, Express Inc., and Tootsie Roll.

Part of a larger case in many U.S. courts over Robinhood’s stock-related activities, the investor litigation concentrated on claimed securities law breaches by the business.

The settlement centers on United States District Judge Cecilia Altonaga rejecting an investor bid on April 19 to submit a fresh request for class certification. In November last year, Judge Altonaga similarly turned down a like-minded motion.

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Following a “short squeeze” by the company, GameStop stocks shot skyward in January 2021, severely hurting hedge funds and other short sellers, while some retail traders made large gains.

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Many blamed this movement on Keith Gill, sometimes known as “Roaring Kitty,” who had returned to X in May.

Google Finance reports that the return to X following an almost three-year break to publish a series of cryptic memes thrilled traders and saw GME close May 14 at $48.75—its highest since late 2021.

The stock experienced a nearly 50% decrease, peaking at $21.24 on May 29 and experiencing an additional 2% drop in trading after hours to $20.78.

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