A federal courtroom in Florida this week dismissed one a part of a proposed three-part class motion lawsuit in opposition to Robinhood and others over their roles in January’s GameStop trading frenzy. Buyers alleged that brokerage companies like Robinhood conspired with clearinghouses and the market maker Citadel Securities to limit buying and selling of meme shares as they shot up in value. The choose discovered in any other case.
“A naked assertion of conspiracy won’t suffice,” Chief Choose Cecilia Altonaga of the USA District Court docket for the Southern District of Florida wrote within the order dismissing the antitrust-based declare. Executives at Robinhood and Citadel Securities “exchanged varied obscure and ambiguous emails” across the time of meme-stock buying and selling halts, the choose famous, which appeared “considerably suspicious given the members and their timing.”
However claims of conspiracy weren’t “believable,” the choose wrote. The companies had a “lawful, ongoing enterprise relationship,” through which Robinhood routes buyer trades to Citadel Securities to execute and will get paid for the order circulation, a typical but sometimes contentious association.
The case isn’t closed. There are two extra tranches on this litigation, which mixed claims from throughout the nation. Retail merchants are additionally claiming Robinhood was negligent in its responsibility to prospects and violated securities legal guidelines.
Maurice Pessah, the lead lawyer on the negligence tranche, told the DealBook newsletter that his case relies on “completely separate and distinct authorized theories.” Robinhood has moved to dismiss the claims; there might be a call by the tip of the yr.