Craig Clough, 10 February 2021
A California federal judge indicated Wednesday that she is unlikely to issue a temporary restraining order or preliminary injunction against Robinhood Financial LLC to prevent it from blocking specific transactions on volatile stocks after a user suing the company said the online trading platform’s recent actions were “unprecedented.”
The lawsuit before U.S. District Judge Virginia Phillips is one of more than 30 civil suits Robinhood is facing over its decision late last month to block users from buying shares of GameStop, AMC and other volatile stocks recently caught up in a well-publicized trading frenzy.
Judge Phillips issued a tentative order before a videoconference hearing Wednesday morning that would deny plaintiff Levi Cobos’ request seeking a TRO or preliminary injunction, but she did not make any final ruling after listening to arguments. The specifics of her tentative order were not discussed during the hearing.
“They took a position, Your Honor, that is very much like Caesar: ‘What’s good for Robinhood is good for its customers, so do what we say,'” Cobos’ lawyer Gerald L. Kroll told Phillips. “When instead the customer is supposed to be king and Robinhood’s burdens on capital requirements are its own personal burdens that it inappropriately shifted to the customer in this situation by totally preventing the transactions from flowing naturally.”