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Robinhood Trading Restriction Suit Gets Lead Counsel, Structure

May 19, 2021, 4:11 PM

Litigation against online brokerages including Robinhood and TD Ameritrade alleging improper restrictions on “meme stock” purchases will go forward with claims grouped into four tranches, a federal judge overseeing the cases in Florida said.

The most efficient way to handle the litigation is to separate the claims by type, with groups for antitrust claims, state law claims against Robinhood, state law claims against other broker-dealers, and federal securities claims, the U.S. District Court for the Southern District of Florida said.

Investors accuse the brokerages of blocking them from trading stocks such as GameStop Corp., AMC Entertainment Holdings Inc., and Tootsie Roll Industries Inc. after Reddit’s r/WallStreetBets forum spurred intense interest in the securities. The investors allegedly lost money when they were blocked from buying the stocks and could only sell, causing prices to drop.

Robinhood Markets Inc., TD Ameritrade Inc., and E*Trade Financial Corp. are among the dozens of online brokerages and clearinghouses named as defendants.

Attorneys with Joseph Saveri Law Firm LLP and Hach Rose Schirripa & Cheverie LLP will serve as lead counsel for the antitrust portion of the litigation, Judge Cecilia M. Altonaga’s order said. A lawyer with the Ferraro Law Firm PA will handle the lead role for the Robinhood claims, and a Safirstein Metcalf LLP attorney will take care of the other state law claims. Altonaga’s Tuesday order didn’t address the federal securities claims.

Altonaga also established a steering committee to “ensure that all tranche members’ interests and positions are represented in decision making.” Attorneys with Anastopoulo Law Firm LLC, McDonald Worley PC, Klafter Lesser LLP, Browne George Ross O’Brien Annaguey & Ellis LLP, and Pessah Law Group PC make up the committee.

The case is In re Jan. 2021 Short Squeeze Trading Litig., S.D. Fla., No. 1:21-md-02989, claim and leadership structure established 5/18/21.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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