Robinhood Beats Investors Again as Appeals Court Upholds Earlier Rule in Meme Stock Trading Suit
Robinhood had earlier motioned for the arguments against it to be completely dismissed.
The federal appeals court of the United States has yet again dismissed a class-action lawsuit against online brokerage firm Robinhood Markets. This follows after 16 investors alleged that the platform did not allow them to buy 13 “meme stocks” during a January 2021 social media frenzy that sent prices to the moon.
According to the complainants, the restriction meant that they could not enjoy any profits. The decision also ended up causing the share prices of these stocks to plunge, they added.
Meanwhile, the suit, which began in September 2021, only lasted for so long. By January 2022, Robinhood motioned for the complaint to be dismissed, and the court granted that request. In its motion at the time, the firm noted that the plaintiffs failed to state any claim.
Still doubtful about the earlier ruling in the Robinhood case, the plaintiffs then proceeded to the US appeals court in March 2023 to seek redress.
As it turns out, the investors may just have hit another setback. US Appellate Court Judge Britt Grant has upheld the earlier ruling, claiming that the case lacks legal merit.
Judge Grant clarified that Robinhood, according to its customer agreement, is permitted to restrict any transaction. That is, the platform may decide whether or not to accept a trade offer.
Is Robinhood Finally in the Clear?
The court may have established that Robinhood had no hand in the arguments against it. But that is only for the time being.
The investors may decide to take the case up a notch by heading to the US Supreme Court, in what would be a final showdown. To do that, however, they must first file a petition for a “writ of certiorari”, which is a document asking the Supreme Court to review the case.
But out of over 7,000 cases that the Supreme Court reviews, it only takes up about 100-150 cases. Therefore, it is not very likely that the investors will have one more day in court over this case.
As of publication, lawyers from both ends – Robinhood and the plaintiffs, have yet to comment on the development.
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Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this.
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