$NOK Tag Archives — Securities Arbitration Lawyer Blog

Did Robinhood Employees Trade GameStop and AMC Before Robinhood’s Public Announcement to Restrict Trading on January 28, 2021?

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed its first amendment to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”).

The public filing, which amends the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO), discloses that the SEC’s Division of Examinations and the Financial Industry Regulatory Authority (“FINRA”) have submitted inquires to Robinhood related to whether any employee executed trades in certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would restrict trading in those securities on January 28, 2021.

On Thursday, January 28, 2021, Robinhood designated specific stocks “position closing only,” restricting its customers from purchasing additional shares in those stocks. The targeted stocks included GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR).

Robinhood’s Amended Registration Statement Discloses That Robinhood Is Facing Numerous Lawsuits, Customer Arbitrations, and Regulatory Investigations

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed Amendment No 1 to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”). Form S-1 is the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO).

Robinhood’s latest public filing discloses that Robinhood continues to face regulatory, legal, and reputational backlash for its past business practices.

The filing also discloses that the SEC and Financial Industry Regulatory Authority (“FINRA”) are investigating whether any Robinhood employees traded “meme stocks,” including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would impose trading restrictions on those securities on January 28, 2021.

Takeaways from Robinhood’s IPO Filing

Published on: July 1, 2021 | by Iorio Altamirano

On July 1, 2021, a day after incurring a record-breaking $70 million from its regulator, FINRA, Robinhood filed a registration statement with the U.S. Securities and Exchange Commission (“SEC”) indicating its intention to go public. The IPO filing reveals that the company plans to list its share on the Nasdaq stock exchange under the symbol HOOD.

The public filing also revealed that the firm has experienced rapid growth and became profitable in 2020. In 2020, Robinhood generated net income of $7.45 million on net revenue of $959 million, compared with 2019, when the firm lost $107 million on $278 million in revenue.

Robinhood’s also disclosed the following information:

Breaking News: Robinhood Ordered to Pay $70 Million, the Largest Financial Penalty Ever Ordered by FINRA

Published on: June 30, 2021 | by Iorio Altamirano

On June 30, 2021, the Financial Industry Regulatory Authority (“FINRA”) announced that it ordered Robinhood Financial LLC to pay approximately $70 million for systemic supervisory failures and significant harm suffered by millions of customers. The sanctions included an order to pay a $57 million fine and $12.6 million in restitution, plus interest, to thousands of harmed customers. According to the FINRA press release, the sanctions represent the largest financial penalty ever ordered by FINRA and reflect the scope and seriousness of the violations.

Robinhood agreed to the sanctions to settle broad regulatory allegations that the firm misled customers, approved ineligible traders for risky strategies, and did not supervise technology that failed and locked millions out of trading.

In determining the appropriate sanctions, FINRA stated that it “considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.”

Investor Alert: Iorio Altamirano LLP Continues to Investigate Robinhood, Webull, T.D. Ameritrade, Interactive Brokers, Charles Schwab, and Other Brokerage Firms for Market Manipulation and Breach of Contract

Published on: February 1, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is investigating claims of market manipulation and breach of contract after Robinhood Markets, Webull Financial LLC, T.D. Ameritrade, Charles Schwab, E*Trade Financial Corp., Interactive Brokers Group, and other online brokerage platforms halted the ability of its clients to purchase GameStop (NYSE: GME), AMC (NYSE: AMC), Novavax, Inc. (NASDAQ: NVAX), Express (NYSE: EXPR), Blackberry (NYSE: BB), Bed Bath & Beyond (NASDAQ: BBBY), Koss Corp. (NASDAQ: KOSS) and Nokia (NYSE: NOK) stock on January 28, 2021.

According to reports, after the popular online brokerage firms implemented the trading restrictions, GameStop ($GME) dropped 44%, and AMC ($AMC) lost 57%. The trading restrictions, which appear to have sent the share prices of targeted companies plunging, set off a firestorm of criticism, including Congress members.

New York Attorney General Letitia James released the following statement on January 28, 2021: “We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock. We are reviewing this matter.”