A group of traders suing Robinhood for the 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 the Florida Southern District Court for an order setting a schedule for briefing a renewed motion for class certification, and for filing expert reports in connection with the briefing of that motion.
The plaintiffs intend to file a renewed motion for class certification to address the deficiencies identified by the Court in its November 13, 2023 Order denying class certification without prejudice.
Specifically, the traders intend to propose and address the applicability of a “modified fraud-on-the-market presumption”. Plaintiffs intend to introduce an additional expert report in connection with this renewed motion to address factual matters relevant to the modified presumption, and intend to rely on documents that Plaintiffs received in discovery subsequent to Plaintiffs’ filing of the initial class certification motion.
This case involves allegations of market manipulation by Robinhood arising from its transaction restrictions in early 2021 following the “meme stock” short squeeze. Specifically, in January 2021, market volatility prompted regulators to raise deposit requirements for clearing brokers, including Robinhood, to ensure they could cover the costs of unexecuted trades.
Robinhood could not afford the new deposit requirements and sought another way to appease regulators. It succeeded after regulators agreed to waive the deposit requirements — so long as Robinhood restricted its customers’ access to certain stocks.
Robinhood blamed market volatility for its restrictions and vehemently denied any trouble with its own liquidity. Plaintiffs allege 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. Back then, the Judge noted that the plaintiffs demonstrate in most respects that the case and their representatives are adequate for class treatment. However, they failed to convince the Court that individualized reliance issues will not predominate.
