Investors in Robinhood Markets Inc (NASDAQ:HOOD) were hardly overwhelmed with positivity as the trading-app maker asked a Miami court to dismiss a suit alleging fraud and market manipulation related to temporary restrictions on trading in so-called ‘meme stocks’ amid volatile markets in early 2021.
A class-action brought by a group of traders that could not buy whilst some shares – including GameStop and AMC Entertainment – were subject to trading restrictions on the platform between January 28 and February 4 2021.
Customers could not buy certain shares at times and there were also restrictions on the number of shares that could be bought for those in-demand securities during that period.
Reuters, in a report, noted that in its motion to dismiss the suit Robinhood claimed that it did not stand to profit from lower share prices caused by restrictions and said that the temporary limits were publicly announced and were therefore not deceptive.
Robinhood’s shares were down 1.76% at US$15.61in New York.