Elise Hansen, 02 April 2021
Dozens of lawsuits against stock-trading app Robinhood over its move to block users from buying shares of GameStop and other volatile stocks will be centralized and moved to the Southern District of Florida, the U.S. Judicial Panel on Multidistrict Litigation said.
Panel Chair Karen K. Caldwell said Thursday that even though the suits have varied defendants and legal claims, there’s enough common ground to centralize the cases. Many of the plaintiffs and all of the defendants supported centralization, the order noted.
“We find that the actions … involve common questions of fact, and that centralization in the Southern District of Florida will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation,” the order said.
At issue are 39 actions pending in 14 different districts, with another 15 related cases that are potential tag-along actions, the filings said. All of the cases stem from trading restrictions that Robinhood and other brokers imposed on popular stocks such as GameStop during a trading frenzy in January. The legal claims vary somewhat, but largely center on breach of contract, breach of fiduciary duty and negligence, with some plaintiffs alleging antitrust, securities and consumer protection violations, court documents show.
Robinhood is named in all but five of the suits, and some of the actions name brokers such as Charles Schwab Corp. and TD Ameritrade Inc. and hedge fund Melvin Capital Management LP, among others, the order said.