A group of traders suing Robinhood over trading restrictions imposed in January 2021 have renewed their efforts to secure class certification.
On December 13, 2023, Blue Laine-Beveridge, Abraham Huacuja, Ava Bernard, Brendan Clarke, Brian Harbison, Cecilia Rivas, Doi Nguyen, Joseph Gurney, Marcel Poirier, Sandy Ng, Santiago Gil Bohórquez and Thomas Cash moved to South Florida. Court for order setting a schedule for the filing of a new motion for class certification and for the filing of expert reports in connection with the filing of that motion.
Plaintiffs intend to reapply for class certification to address the deficiencies identified by the Court in its November 13, 2023 decision denying class certification without prejudice.
Specifically, traders intend to propose and address the applicability of a “modified presumption of market fraud.” Plaintiffs intend to introduce an additional expert report in connection with this renewed motion to address factual issues related to the amended presumption and intend to rely on documents obtained by Plaintiffs during discovery after Plaintiffs filed the original petition for certification category.
This case involves allegations of market manipulation by Robinhood that arose from its trading restrictions in early 2021 after the brief squeeze on “equity.” Notably, in January 2021, market volatility prompted regulators to increase deposit requirements for clearing brokers, including Robinhood, to ensure they could cover the cost of backlogs.
Robinhood couldn’t afford the new deposit requirements and looked for another way to appease regulators. It succeeded after regulators agreed to waive deposit requirements — as long as Robinhood was limiting its customers’ access to certain stocks.
Robinhood blamed market volatility for its constraints and strongly denied any problems with its own liquidity. The plaintiffs allege that Robinhood manipulated the market when it imposed such restrictions, accompanied by “half-truths” about market volatility, while conveniently omitting any mention of liquidity issues.
On November 13, 2023, the Court denied the first motion for class certification. At the time, the judge noted that the plaintiffs have largely established that their case and representatives are sufficient for class action. However, they failed to convince the Court that individualized trust issues would not prevail.