Trading platform Robinhood is working to finalize a settlement with investors who sued it for halting the trading of certain meme stocks in 2021, including GameStop.
In a May 28 filing to a Miami federal court, Robinhood’s lawyers said it is “in the process of finalizing the settlement” with the group of investors and expects settlement and dismissal in the next two weeks.
The filing did not include the settlement’s details. Robinhood, its counsel and the investor group’s counsel did not immediately respond to requests for comment.
The investors, including lead Plaintiff Blue Laine-Beveridge, alleged Robinhood “unlawfully manipulated market prices” and “wiped out tens of billions of dollars of investors’ equity” by “picking and choosing” what stocks its users could buy between Jan. 28 and Feb. 4, 2021.
The investors claimed they held shares in GameStop, AMC , Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc. and Tootsie Roll, which were affected by Robinhood’s action.
The investor suit focused on Robinhood’s alleged securities law violations and is part of a wider lawsuit in multiple U.S. jurisdictions over the firm’s meme stock-related actions.
The settlement follows United States District Judge Cecilia Altonaga denying a bid from the investors to file a new motion for class certification on April 19. Judge Altonaga also knocked back a similar request in November last year.
Stocks such as GameStop and AMC are referred to by some as meme stocks as many retail investors trade them based on social media hype. GameStop stocks went meteoric in January 2021 after a “short squeeze” of the stock, causing major losses for hedge funds and other short sellers while some retail traders made significant returns.
Many credited this movement to Keith Gill, also known as “Roaring Kitty,” who recently made a return to X in May. The return to X after a nearly three-year hiatus to post a series of cryptic memes excited traders and saw GME Close May 14 at $48.75 — its highest since late 2021, according to Google Finance.
