Robinhood: Trading Restrictions
January 7, 2022 - Iorio Altamirano LLP is proud to announce that we have secured a groundbreaking arbitration award for a retail investor against Robinhood. The award is notable because it is the first win by a retail investor against Robinhood over its decision to restrict the trading of certain "meme stocks" on January 28, 2021. This award is a monumental and historic win for retail investors.
The investor, a 27-year-old truck driver, invested in shares of KOSS and EXPR late in the day on January 27, 2021. He suffered significant investment losses when Robinhood prevented its users from purchasing new positions pre-market on January 28, 2021, and the share prices of the securities tumbled. Iorio Altamirano LLP filed a FINRA arbitration claim on his behalf. New York securities arbitration attorneys August M. Iorio and Jorge Altamirano represented the investor. On January 5, 2022, the arbitrator awarded the investor compensatory damages and interest and also assessed all forum fees to Robinhood.Iorio Altamirano LLP Investigating Robinhood for January 2021 Trading Restrictions
Iorio Altamirano LLP, a leading securities arbitration law firm, is investigating claims on behalf of Robinhood Financial LLC (“Robinhood”) customers for the firm’s decision to place trading restrictions on certain securities pre-market opening on January 28, 2021.
On January 28, 2021, Robinhood restricted its customers from purchasing shares of publicly traded companies, including GameStop, AMC, Nokia, BlackBerry, Bed Bath & Beyond, Naked Brands, Koss, and Express. Robinhood used the term “position closing only” or “PCO” to describe its trading restrictions. The moment Robinhood implemented the PCO trade restrictions, the share prices of many of these companies plummeted pre-market and continued to fall after the market opened on January 28, 2021.
Upon information and belief, Robinhood implemented the PCO trade restrictions because the firm was negligent in its liquidity management practices in the days and weeks leading up to January 28, 2021.
Robinhood had the tools and resources to monitor its risk and estimate potential clearing fund requirements.
The firm’s failure to implement effective funding and liquidity risk management practices led to its inability to meet its obligations during a period of volatility, which ultimately led to its decision to cut off market access to customers.
Current and former Robinhood customers who held the targeted securities before Robinhood applied the trade restrictions on January 28, 2021, are encouraged to complete the following form for a free and confidential consultation. Customers may be entitled to compensation without paying any out-of-pocket fees or costs through a contingency fee arrangement with securities arbitration law firm Iorio Altamirano LLP.
Iorio Altamirano LLP currently represents Robinhood traders in filing securities arbitration claims against the firm for placing trading restrictions on certain securities in January 2021.About Iorio Altamirano LLP
Iorio Altamirano LLP is a national securities litigation law firm based in New York, NY. The law firm pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.
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