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id: 658

2021 Robihood (HOOD) Financial Short Squeeze Case

S.D. Florida
Case number
28 Jan 2021
Class period Start
19 Feb 2021
Class period End
06 Jun 2023
Lead Plaintiff motion deadline
Any Investor who held call options on $AMC, $GME, $AAL, $BBBY, $BB, or $NOK at the close of 27-Jan-2021, and who sold these Options in the loss or whose Options expired between 28-Jan-2021 and 19-Feb-2021, may Join this Case.

Investors have reasons to suspect that:
  • Throughout 2020 and in January 2021, Robinhood whipped up a frenzy of trading and then shut it down, unevenly reopening the demand spigot over the course of a week, directly affecting the markets’ bid-offer pricing mechanism for some Stocks and Options.
  • Robinhood’s singular actions distorted the prices of some Stocks and relevant Options for several weeks in January and February 2021 which led to consecutive investment losses for investors.
  • With an IPO already being planned, Robinhood manipulated the share prices of several Stocks and Options, which were contributing to the rapid increases in the prices of several Stocks and Options, to avoid liquidation due to an inability to pay its core charges and excess net capital charges to the NSCC.
  • On January 29, 2021, when all other brokers lifted stock purchase restrictions and Robinhood started to do the same, the prices of several Stocks and Options rebounded so strongly that Robinhood – which had only raised capital of $1 billion on January 28, 2021 – realized that it would be unable to meet an excess capital premium charge and for this reason, at several points throughout the trading day – the only retail broker still restricting stock and option purchases – not only tightened the purchase restrictions but increased the number of issuers to which restrictions applied from 13 to 23 to 50.
Given Robinhood's dominant market share, actions of this nature could have a significant effect on the quotes of several instruments, which could lead to significant losses for market participants.
Alleged Offence
Price manipulation
Breach of Fiduciary duty
Suspected Party
Service Provider
Security Type
Trade Direction
Shock Event Date
19 February 2021
Filing date
06 April 2023
Lead Plaintiff Deadline
06 June 2023
Honorable Cecilia M. Altonaga
Collecting participants…

Robinhood Markets Inc

Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), options, gold, and cryptocurrencies. ...

    Financial Services
    Capital Markets
    85 Willow Road, Menlo Park, CA, United States, 94025