Robinhood meme stock punters denied class dress proof.

In the year Investors seeking legal action against Robinhood over trade restrictions imposed as early as 2021 face another setback after the U.S. District Court for the Southern District of Florida on Nov. 13, 2023, denied the plaintiffs' request for class certification.

Chief Justice Cecilia Altonaga said that after a thorough review of written submissions, records and relevant law, the plaintiffs' motion was dismissed because they failed to convince the court that individual trust issues were not prevalent.

Robinhood is a platform that offers commission-free trading for stocks, exchange-traded funds, options and cryptocurrencies. Users can trade these financial instruments through the app or website without making traditional payments.

The plaintiffs' purpose was to assert class action against Robinhood Markets, Robinhood Financial and Robinhood Securities under the federal securities laws, asserting claims for market manipulation.

The lawsuit centers on allegations of market manipulation by Robinhood, which stemmed from limited trading in early 2021 during a short squeeze in “meme stock.” In January 2021, heightened market volatility prompted regulators to raise deposit requirements for clearing brokers, including Robinhoon, to reduce the risks associated with unexecuted trades.

Robinhood was unable to meet the increased deposit requirements and pursued an alternative solution to satisfy regulators. Regulators waived Robinhood-based deposit requirements while imposing restrictions on customers' ability to trade certain stocks.

The forum cited the restrictions due to market volatility and strongly denied any liquidity problems. Plaintiffs allege that the platform manipulated the market by imposing limits, offering “half-truths” about volatility, and faking liquidity challenges.

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Robinhood urged denial of class certification, citing defects in class representatives and arguing that separate issues of benefit and harm overshadow common issues. The defendants' representatives are sufficient, and the case is suitable for class certification.

The court mostly showed that the plaintiffs and their representatives are suitable for class management. However, they failed to convince the court that trust issues at the individual level will not be widespread.

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