Lawsuits see conspiracy in Robinhood’s GameStop moves, but experts doubt narrative MarketWatch 1/30/2021 © AFP via Getty Images
The commission-free online brokerage Robinhood faces several new class-action lawsuits brought by customers across the country this week, alleging the company prevented them from buying shares of GameStop Inc. and other hot socks for nefarious reasons.
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Legal experts tell MarketWatch, however, that plaintiffs will face an uphill battle seeking damages because there are good regulatory explanations for why the buy ban was initiated and because user agreements give the broker wide latitude to block sales and liquidate user accounts.
“The most pertinent facts are the real reasons why Robinhood halted the trading and the extent to which all investors were treated equally,” Jill Fisch, professor of business law at the University of Pennsylvania’s Carey Law School told MarketWatch.
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