Robinhood Accused of Market Manipulation in a Class-Action Lawsuit

Robinhood, a platform that supports cryptocurrencies and stocks, is facing multiple allegations of market manipulation as part of a class-action lawsuit. The lawsuit was filed against investors in nine companies involved in Mem shares in January last year.

Robinhood faces class-action lawsuit

A report published by Reuters on Thursday said investors in several companies, including GameStop and AMC, were granted permission by U.S. District Court Judge Cecilia Altonaga for the Southern District of Florida to proceed with the lawsuit against Robinhood. False supply numbers for these stocks.

In January of last year, the price of cryptocurrencies such as Dogecoin rose to all-time highs after a subreddit group known as r/Wallstreetbets recorded high interest in some stocks and cryptocurrencies.

After these stocks started to rise in value and start recording huge gains, the platform suspended the purchase of GME shares and other assets. The rise in the prices of these stocks created friction between retail investors and large hedge funds on Wall Street.

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After the increased activity around these shares, thousands of Robinhood users gave one-star reviews for the Robinhood app on the Google Play Store. The exchange has suspended plans for an initial public offering (IPO) in the US. Several class-action lawsuits have been filed against Robinhood, alleging that the exchange is playing to protect the interests of hedge funds following its previous ties to Citadel and Melvin Capita.

The 2021 meme stock controversy has made the platform the target of several US lawmakers seeking clarification on the issue. Robinhood CEO Vlad Tenev testified before a House Financial Services Committee hearing in February 2021.

In the year On August 2, the New York Department of Financial Services announced that Robinhood Crypto would pay a $30 million fine to New York State for failing to comply with Bank Secrecy Act/Anti-Money Laundering obligations.

Robinhood is about to lay off the staff.

Robinhood has released its financial results for Q2 2022, Tenev added that the exchange plans to lay off 23% of its employees. Robinhood’s CEO cut its workforce by 9% in April, but the marketing platform hasn’t changed significantly. The company’s shares are also trying to recover, and are up more than 26 percent in the past month.

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