Robinhood, a brokerage firm that provides trading services for traditional stocks as well as crypto assets, is currently facing about 46 lawsuits as it blocked the trading of Gamestop (GME) shares at the price peak.
It turned out that the firm faced at least “46 putative class action and three individual transactions” last month due to trade restrictions, in a file released Friday. The firm wrote in its official file:
“As of the time the financial statements were ready for publication, we became aware of about 46 possible class actions and three separate cases brought against RHM, RHF and / or RHS in various federal and state courts for the beginning of 2021. Complaints generally alleged breach of contract, breach of good faith and fair dealing, negligence, breach of fiduciary duty and other customary law issues. ”
The firm claimed that the cessation of GME stock trading was done to protect traders from a volatile market, but many accused the firm of insufficient liquidity. Many also believe that Robinhood is blocking GME trading at the behest of investors in the company, which holds a prominent position in the hedge fund Melvin Capital, which bought most of the short positions against GME.
In addition, in the midst of a few lawsuits and private fundraising, the firm is currently planning to hold its IPO in early March.
The mobile trading and brokerage firm also faced the ire of the crypto world as it first unethically stopped trading GME stocks and then Dogecoin trading on its platform.