Robinhood is nearing a settlement with investors who sued over its decision to halt trading of meme stocks like GameStop in 2021. The lawsuit, led by plaintiff Blue Laine-Beveridge, is expected to be dismissed within two weeks.
On May 28, 2024, Robinhood’s attorneys indicated that the settlement process is almost complete. This lawsuit accused Robinhood of market manipulation, claiming that restricting stock purchases from January 28 to February 4, 2021, caused significant financial losses for investors. The halted stocks included GameStop, AMC Entertainment, and others.
Robinhood’s stock (HOOD) surged 3% amid the settlement news, closing at $21.08 on May 29. In contrast, GameStop’s stock, which once peaked at $48.75 due to social media hype, fell to $21.24.
This settlement is part of a broader legal challenge against Robinhood’s actions during the meme stock craze. The outcome may significantly impact future trading regulations and investor protections.
