Here is how you can file a claim to recover losses suffered from trading restrictions placed on GameStop, AMC, Blackberry, Nokia, and other stocks.
On February 12, 2021, in a letter addressed to Senator Elizabeth Warren, Robinhood Financial, LLC confirmed twenty-four (24) pending securities arbitrations.
Robinhood’s letter was written in response to an inquiry sent by Senator Warren on February 2, 2021, as to why Robinhood “abruptly changed the rules” for retail investors by restricting the purchase of certain securities.
On Thursday, January 28, 2021, Robinhood designated specific stocks “position closing only,” meaning that customers could not purchase additional shares in those stocks. The targeted stocks included GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), and Nokia (NYSE: NOK). In the days that followed, Robinhood continued to impose certain restrictions on these stocks. The restrictions on AMC and GME lasted until February 5, 2021.
According to reports, after Robinhood and other popular online broker-dealers such as Webull Financial LLC implemented the trading restrictions, GameStop dropped 44%, and AMC lost 57%. The trading restrictions appear to have sent the share prices of targeted companies plunging.
What is Securities Arbitration?
Arbitration is an alternative dispute resolution process. When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. Arbitration is the primary forum for resolving disputes between investors and brokerage firms because it is a contractual obligation. The customer and broker-dealer contractually agree to use arbitration to resolve disputes when the customer opens a brokerage account and signs the customer agreement that includes an arbitration clause. To read more about securities arbitration, click here.
How to Recover Financial Losses or Obtain a Free Consultation
Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.
If you have suffered financial losses, please fill out the following form for a free and confidential consultation. You may be entitled to compensation without payment of any out-of-pocket fees or costs through a contingency fee arrangement.
Iorio Altamirano LLP is particularly interested in speaking with investors that have:
- purchased and held GME, AMC, NVAX, EXPR, BB, BBBY, KOSS, or NOK before Robinhood and other popular trading platforms restricted transactions on January 28, 2021;
- subsequently sold their positions; and
- suffered losses of $25,000 or more.
How is an Arbitration Claim Different Than a Class Action?
A securities arbitration complaint is brought by an individual against a brokerage firm. The person who brings the claim (the Claimant) has complete control over settlement decisions. If the dispute is not settled, an arbitration panel will hear evidence and decide whether the brokerage firm is liable to the Claimant. The arbitration panel will also determine how much, if any, monetary damages are owed to the Claimant.
A class action complaint is a lawsuit filed in court by an individual on behalf of all like suited individuals. Individuals who are not class representatives do not have input on settlement decisions. Class actions can be dismissed for various reasons, and even if there is a recovery someday, class members often only receive pennies on the dollar.