A group of traders, including Blue Laine-Beveridge, Abraham Huacuja, Ava Bernard, and others, are intensifying their legal battle against Robinhood over the trading restrictions imposed in January 2021. The traders filed a motion in the Florida Southern District Court on December 13, 2023, seeking a schedule for briefing a renewed motion for class certification and the filing of expert reports.

The move comes after the Court denied the initial motion for class certification on November 13, 2023, without prejudice, citing concerns about individualized reliance issues. The plaintiffs, determined to address the deficiencies identified by the Court, are proposing the applicability of a “modified fraud-on-the-market presumption” in the renewed motion for class certification.

Traders Renew Legal Battle Against Robinhood

The case revolves around allegations of market manipulation by Robinhood during the notorious “meme stock” short squeeze in early 2021. In response to heightened market volatility, regulators increased deposit requirements for clearing brokers, including Robinhood. Facing financial strain, Robinhood implemented transaction restrictions on certain stocks, a move that drew sharp criticism.

The plaintiffs argue that Robinhood while blaming market volatility for the restrictions, failed to disclose liquidity issues and manipulated the market. They contend that the company’s actions were accompanied by “half-truths” about market conditions, creating a misleading narrative.

To bolster their renewed motion for class certification, the traders plan to introduce an additional expert report addressing factual matters related to the modified presumption. The report will draw on documents obtained during discovery subsequent to the filing of the initial class certification motion.

The traders’ legal pursuit seeks to hold Robinhood accountable for its actions during the turbulent events of early 2021 and highlights the ongoing tension between retail traders and trading platforms. As the legal proceedings progress, the financial industry and legal observers will closely monitor the case’s potential implications for market regulations and the responsibilities of trading platforms.

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