Robinhood is a relatively simple trading app that made it possible for investors to buy stocks on their phones. This was something many small-time investors used when just getting started or when looking for flexible ways to make trades on their schedule.
While the app gained massive popularity, all that is now in question as the parent company is facing a class-action lawsuit. The suit alleges that the company made it impossible for traders to buy very specific stocks, skewing the market, influencing the value of those stocks and financially harming app users.
How the Robinhood dispute happened
What happened really was unprecedented: A popular internet forum/social media site called Reddit features a trading group called WallStreetBets. The group began promoting the stock of GameStop, a video game seller that has been waning in popularity as digital downloads replace physical games.
As the stock suddenly soared due to this interest, Robinhood took the major step of restricting buying. Many investors found that they couldn’t buy their preferred stocks at all, while others found that all they were allowed to do was sell their stocks.
Since the stock had gone up more than 1,000% at the time, users were outraged. Reports indicate that at least 31,000 of them joined a new Reddit group focused on suing the trading app.
What are your options if you feel you unfairly lost money on investments?
Do you think you have lost money as an investor due to market manipulation or other forces outside of your control, similar to what happened here? If so, you absolutely need to know exactly what legal options you have at your disposal.