Retail Merchants Sue Robinhood Over Meme Inventory Restrictions

Retail merchants in two U.S. states sued Robinhood Markets Thursday over its determination to stop purchase orders on GameStop and different so-called “meme shares” swept up within the Reddit-fueled buying and selling frenzy.

The separate fits slam Robinhood over a choice that had fast repercussions for impacted shares. GameStop, which had been hovering for days on quick squeezing and mass hypothesis, started tumbling downward after Robinhood, a serious retail buying and selling hub, applied the maintain.

Massachusetts resident Brendon Nelson alleged Robinhood tried to “sluggish the expansion of GME” with out reliable trigger, a transfer he mentioned advantages Robinhood’s institutional buyers over its shoppers in violation of its buyer settlement. He filed for a class action suit in New York federal court docket.

The opposite case, filed by Richard Joseph Gatz in Chicago federal court docket, alleged Robinhood “brought about irreparable hurt” to retail merchants of Nokia, AMC Theaters and Blackberry when it disabled purchase orders Thursday, in keeping with Bloomberg.

Robinhood didn’t instantly reply with remark.