GameStop

Trading platform Robinhood is working to finalize a settlement with investors who sued it for halting the trading of certain meme stocks in 2021, including GameStop.
In a May 28 <a href="https://www.courtlistener.com/docket/59783498/in-re-january-2021-short-squeeze-trading-litigation/?filed_after=&amp;filed_before=&amp;entry_gte=&amp;entry_lte=&amp;order_by=desc#entry-678" target="_blank" rel="noopener noreferrer nofollow">filing</a> to a Miami federal court, Robinhood’s lawyers said it is “in the process of finalizing the settlement” with the group of investors and expects settlement and dismissal in the next two weeks.
The filing did not include the settlement’s details. Robinhood, its counsel and the investor group’s counsel did not immediately respond to requests for comment.
The investors, including lead Plaintiff Blue Laine-Beveridge, alleged Robinhood “unlawfully manipulated market prices” and “wiped out tens of billions of dollars of investors’ equity” by “picking and choosing” <a href="https://cointelegraph.com/news/rob-from-the-poor-and-give-to-the-rich-robinhood-prompts-furious-backlash-after-restricting-trades" rel="noopener noreferrer nofollow">what stocks its users could buy</a> between Jan. 28 and Feb. 4, 2021.
The investors claimed they held shares in GameStop, AMC , Bed Bath &amp; Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc. and Tootsie Roll, which were affected by Robinhood’s action.
The investor suit focused on Robinhood’s alleged securities law violations and is part of a wider lawsuit in multiple U.S. jurisdictions over the firm’s meme stock-related actions.
The settlement follows United States District Judge Cecilia Altonaga denying a bid from the investors to file a new motion for class certification on April 19. Judge Altonaga also <a href="https://cointelegraph.com/news/robinhood-meme-stock-punters-denied-class-suit-certification" rel="noopener noreferrer nofollow">knocked back a similar request</a> in November last year.
Related: <a href="https://cointelegraph.com/news/robinhood-crypto-business-sec-wells-notice" rel="noopener noreferrer nofollow">Robinhood crypto business slapped with SEC Wells notice</a>
Stocks such as GameStop and AMC are referred to by some as <a href="https://cointelegraph.com/explained/can-memecoins-be-used-as-real-currency" rel="noopener noreferrer nofollow">meme</a> stocks as many retail investors trade them based on social media hype.
GameStop stocks went meteoric in January 2021 after a “short squeeze” of the stock, causing major losses for hedge funds and other <a href="https://cointelegraph.com/explained/long-and-short-positions-explained" rel="noopener noreferrer nofollow">short sellers</a>&nbsp;while some retail traders made significant returns.
Many credited this movement to Keith Gill, also known as “Roaring Kitty,” who recently <a href="https://cointelegraph.com/news/gamestop-crypto-memecoin-rally-can-history-repeat-itself" rel="noopener noreferrer nofollow">made a return to X</a> in May.&nbsp;
The return to X after a nearly three-year hiatus to post a series of cryptic memes excited traders and saw GME Close May 14 at $48.75 — its highest since late 2021, <a href="https://www.google.com/finance/quote/GME:NYSE" target="_blank" rel="noopener noreferrer nofollow">according</a> to Google Finance.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/b01d1356-79cc-42b6-a4b0-03c653ce67c0.png">
 <figcaption style="text-align: center;">GameStop is up nearly 27.5% year-to-date after Gill’s X posts. Source: Google Finance
 </figcaption>
</figure>
It’s since fallen by over half, closing nearly 11% down on May 29 at $21.24, with an additional 2% drop in after-hours trading to $20.78.
Magazine: <a href="https://cointelegraph.com/magazine/meme-coins-betrayal-crypto-ideals-or-true-purpose/" rel="noopener noreferrer nofollow">Meme coins: Betrayal of crypto’s ideals… or its true purpose?</a>

Robinhood nears settlement on GameStop, meme stocks suit

Cointelegraph

Other articles published on May 30, 2024

4 Cryptos Ready for a Breakout in 2024

Jack Dorsey-backed Bitcoin mining pool opens headquarters in El Salvador

Top Crypto Gainers Today May 30 – Arkham, Klaytn, Trust Wallet Token, Worldcoin

SEC Commissioner pitches safe space for digital securities experiment

Crypto: Ripple plays its last trump card to destabilize the SEC

What Crypto Whales Are Buying for Potential Gains in June 2024

Join our free newsletter for daily crypto updates!