(GNB Desk): Robinhood, one of the popular financial trading app facing with a federal class action lawsuit after blocking users from buying or trading stocks popular on a Reddit subforum, including GameStop, AMC and BlackBerry.
Under the new limits, users will be allowed to close out existing trades, but won’t be able to acquire new shares.
“We continuously monitor the markets and make changes where necessary. “ Robinhood wrote in a blog post. “In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities”.
The lawsuit, filed in the Southern District of New York on Thursday, alleges that the app “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise, thereby deprived [sic] retail investors of the ability to invest in the open-market and manipulating the open-market.”
Alexander G. Cabeceiras, the attorney who filed the suit, tweeted shortly after: “‘Robinhood’s mission is to democratize finance for all.’ This is simply not true.”
“Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and make adjustments as needed”, Co-Founder of Robinhood twitted after facing a class-action lawsuit against the company.
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