Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC have filed a Motion for Leave to Take Additional Depositions at the Florida Southern District Court. This move comes as the trading platform faces renewed efforts from traders for class certification in the lawsuit.
The court had earlier ordered bifurcated discovery in the case, with class certification discovery preceding merits discovery. Robinhood had already deposed the 12 named plaintiffs and five third-party retail investors directly involved in the social-media-driven stock frenzy at the heart of the case during the class certification discovery phase.
Now, Robinhood is seeking to depose 14 additional third parties, including the National Securities Clearing Corporation (NSCC), certain brokers that implemented similar trading restrictions, and the issuers of some of the stocks referred to as the “Affected Stocks.”
While Robinhood has agreed to allow plaintiffs to take 20 depositions of Robinhood employees alone, the traders are resisting Robinhood’s request for more than a single additional deposition. Robinhood is urging the court to grant its motion to take up to 14 additional fact depositions.
Robinhood Pursues Additional Depositions Amid Class Certification Renewal
The plaintiffs allege that Robinhood manipulated the securities market by imposing trading restrictions during the Meme Stock frenzy. Robinhood aims to demonstrate that extreme market volatility, driven by retail investors’ activities in meme stocks, led to unprecedented collateral requirements, compelling the platform to implement the contested trading restrictions.
Despite having deposed the 12 class representatives and five third-party individuals during class certification, the court denied class certification, stating that common issues did not predominate over individual issues.
In response, plaintiffs argue that Robinhood is now limited to a single merits-related deposition, focusing on the NSCC. However, Robinhood contends that it used its ten depositions reasonably during class certification and that it would be unfair not to allow additional depositions, which are crucial to the key issues in the case.
The requested depositions include the NSCC, which played a central role by issuing the collateral call leading to Robinhood’s trading restrictions, certain third-party brokers who implemented similar restrictions, and the issuers of the Affected Stocks. Robinhood believes these depositions will provide essential insights into the reasons behind the trading restrictions, market inefficiencies, and the impact on customers and stock prices.
The legal proceedings continue, shedding light on the complex dynamics of the January 2021 short squeeze and its aftermath.
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