Robinhood and TD Ameritrade Retail Investors Accuse the Trading Platforms of Antitrust Conspiracy

At the end of a busy week for the popular investing and stock trading app, Robinhood, two more plaintiffs claim that the broker-dealer and others illegally blocked retail investors from purchasing certain securities. The antitrust complaint names Robinhood, TD Ameritrade, owned by the Charles Schwab Corporation, and one of Robinhood’s largest clients, hedge fund Citadel Enterprise Americas LLC, as defendants and claims that they purposefully manipulated the market for the benefit of hedge funds and institutional investors.

Thursday’s Central District of California complaint follows a bevy of lawsuits filed this week after Robinhood prevented users from buying three stocks at issue in this case, Naked Brand Group Ltd. (NAKD), Nokia Corporation (NOK), and AMC Entertainment Holdings Inc. (AMC), among others and amidst unprecedented share price increases.

Law Street Media previously reported that the boost in GameStop Corp.’s (GME) share price was due to a retail investor buying surge. The Reddit-driven buying frenzy reportedly created a short squeeze, driving prices up even higher. According to the instant complaint, Citadel Enterprise Americas reloaded its short sale positions before telling Robinhood to stop trading GME shares.

The plaintiffs, two retail investors who tried to purchase securities Robinhood barred them from buying on its app, contend that the defendants’ “intentional and willful” restriction of certain securities dispossessed retail investors of the ability to invest in the free market.  Meanwhile, the complaint avers, hedge funds and institutional investors were permitted to trade as normal. Thus, the plaintiffs said, like the platforms’ other retail investors, they lost out on all earning opportunities.

In turn, the plaintiffs are seeking to certify a class of all Robinhood and TD Ameritrade customers within the United States. The plaintiffs charged the defendants with monopolization and attempted monopolization in violation of the Sherman Act and bring consumer protection law, breach of contract, and tort claims. They sought immediate injunctive relief, damages, punitive damages, and their attorneys’ fees and costs.

The plaintiffs are represented by Blaise & Nitschke PC.