On Monday, defendants filed three motions to dismiss various claims in the Robinhood short-squeeze MDL. Robinhood filed a joint Motion to Dismiss the Antitrust Tranche of the Corrected Consolidated Class Action Complaint, along with its fellow defendants, E*TRADE, Citadel Securities, Interactive Brokers, Apex Clearing Corporation, Electronic Transaction Clearing, and PEAK6 Investments. The Robinhood entities also filed a separate motion to dismiss the Robinhood Tranche.
The litigation stems from the January 2021 market volatility surrounding GameStop, which saw its stock price increase 134% — and other stocks increased between 200% and 300% — all in a single day. So-called “meme” stocks like GME, AMC were also affected by that volatility. The aftermath resulted in FINRA issuing its highest-ever fine: $70 million.
The MDL, which is proceeding in the Southern District of Florida under Chief Judge Cecilia M. Altonaga, has several “tranches.” Plaintiffs in the Robinhood Tranche claim that Robinhood and other defendants committed torts including negligence and gross negligence. The Antitrust Tranche, which involves the antitrust Consolidated Class Action Complaint, alleges violations of the Sherman Act’s antitrust violation of conspiracy to restrain trade.
In the Antitrust Tranche complaint, the putative class includes those allegedly harmed by the January 2021 outage, and the plaintiffs seek treble damages.
In the Robinhood Tranche, the plaintiffs argue that Robinhood and other financial companies were negligent in their recruiting of retail investors, were not adequately capitalized, and failed to meet the margin requirements that should safeguard frenzied market activity.
The Joseph Saveri Law Firm LLP and Hach Rose Schirripa & Cheverie LLP are co-lead counsel for the antitrust tranche, and the Ferraro Law Firm P.A. is lead counsel for the Robinhood tranche.
