Trading App Robinhood Sued After GameStop Stock Market Fiasco

A class action lawsuit has now been filed in relation to the stock market fiasco that occurred yesterday. Members from a subreddit group called StockMarketBets banded together and bought GameStop stock, driving the price to exponential highs and shorting a hedge fund millions of dollars. A lot of these amateur investors used a free stock trading app known as Robinhood to do this. Everything that occurred was legal, but as the price of the stock was driven up, the app feared the bubble could burst. This prompted them to implement a temporary ban yesterday to protect “market volatility.” It prevented users from further buying shares of GameStop, AMC Theaters, and several other companies predicted to fail over the last few months. They have since eased their restrictions but it wasn’t before the lawsuit was filed. It claims Robinhood’s purposeful actions rigged the market against its customers “to benefit traders and financial institutions” instead. It reportedly has the support of over 31,000 Reddit users.