Robinhood has come to a settlement at GameStop, meme stocks appropriate
Trading platform Robinhood is working to finalize a deal with investors who have sued to stop trading of certain comedy stocks, including GameStop, in 2021.
In a May 28 filing in federal court in Miami, Robinhood's attorneys said it is “finalizing its steps” with the investor group and expects a settlement and eviction within the next two weeks.
The record did not include settlement details. Robinhood, its adviser and counsel for the investor group did not immediately respond to requests for comment.
The investors, including lead plaintiff Blue Line-Beverage, said Robinhood “illegally manipulated market prices” and lost tens of billions of dollars in investor equity by “picking and choosing” what stocks its users bought between January 28 and 2011. February 4, 2021
Investors affected by the Robinhood action include GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc. And they said they own shares in Tootsie Roll.
The investor's lawsuit focuses on Robinhood's securities violations and is part of a broader lawsuit in several US states related to the company's Mem stock.
The settlement comes after US District Judge Cecilia Altonaga on April 19 rejected the investors' bid to file a new class action deed. Judge Altonaga struck down a similar request in November last year.
Related: Robinhood crypto business slapped with SEC Wells announcement
Stocks like GameStop and AMC are referred to by some as meme stocks because many retail investors trade them based on social media.
Shares of GameStop have seen a meteoric rise since January 2021 after a “short squeeze” on the stock, which led to heavy losses for hedge funds and other short sellers, while some retailers made significant gains.
Many attributed this move to Keith Gill, also known as “Roaring Kitty”, who recently returned to X in May.
A return to X after a three-year hiatus to post a series of cryptic recalls delighted traders and saw GME close May 14 at $48.75 — the highest since late 2021, according to Google Finance.
It fell by more than half, closing nearly 11% at $21.24 on May 29, in after-hours trading down 2% to $20.78.
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