Investors in GameStop Corp, AMC Entertainment Holdings Inc, and seven other stocks can file a class action lawsuit against online broker Robinhood for market manipulation and price gouging. This was reported by Reuters citing a court order for the Southern District of Florida.

In January 2021, Robinhood temporarily banned users from purchasing shares of a number of companies that were at a record price at the time, including the Dogecoin meme-cryptocurrency.

The platform was accused of “deliberately and knowingly” depriving private traders of investment opportunity. The volatility has led to huge losses for hedge funds that are betting on falling stock prices.

The court had previously dismissed allegations of collusion between Robinhood and other brokerage firms and the company’s breach of its obligations to customers.

However, in a new ruling, the judge rejected the platform’s request that it could not be considered market manipulation for the platform to artificially lower the price of nine shares by canceling buy orders, canceling liquidity and closing options.

“Besides the opaque and controversial statements made to hide the lack of capital, [данные ограничения] Indicate Robinhood’s intention to artificially lower share prices for its own self-interest,” writes the resolution.

The company must also prove that the alleged manipulation was not a securities fraud.

However, the court rejected the statement that these actions should encourage investors to sell their shares.

Sheryl Crumpton, Robinhood’s general litigation and enforcement attorney, told Reuters that she will continue to defend her position, taking into account all the restrictions the online broker has taken “appropriate and necessary to support clients”.

ForkLog previously reported that Robinhood will pay $9.9 million to a group of customers suing the online broker for systemic app crashes. Plaintiffs estimated their damages at $20.4 million.

Recall that after the release of Robinhood’s financial results for the second quarter of 2022, the company announced its intention to lay off 23% of the company’s employees.

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