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A judge of the United States District Court ruled that Mr. Robinhood was to prosecute a market manipulation related to last year's matchmaking.
U.S. District Court Judge Cecilia Altonaga from the Miami court has ruled that trading platform Robinhood must go through with a lawsuit related to several stocks from the meme stock rally last year. Robinhood must not face market manipulation claims when it has temporarily prevented customers from purchasing certain securities in early 2021.
These actions include gamestop and amc, both of which were at the heart of the madness that occurred in 2021. Retail merchants bought the inventory en masse, which resulted in a massive rise in prices. The trading platform then limited trading in stocks to traders' anger.
Robinhood and others imposed restrictions on the purchase of shares, with the trading venue doing multiple shares because it was facing a deluge of purchases. The case was the beginning of a series of negative headlines for the company that saw its share price decrease since the price spike in August 2021.
Judge Altonaga has also cast aside claims from retail investors that Robinhood was negligent and breached its duty, as well as the claim that Robinhood conspired to put a stop to a short squeeze. In the meantime, the company says it believes the actions it has taken were "appropriate and necessary".
Robinhood's going through a rough patch.
Robinhood has not had the most stellar 2022, with several notable developments taking place. The platform had to cut its workforce by this quarter, while its crypto trading unit was fined $30 million in a landmark case.
Meanwhile, there have been rumors that FTX was considering acquiring the exchange. CEO Sam Bankman-Fried denied these rumours, despite having himself a 7.6% stake in the red wood.
Still aiming to grow
While times have been tough for Robinhood, it has been focusing on expanding its business. It plans to a non-custodial , which would pit it against giants COINBASE and MetaMask. He also plans to integrate the crypto company of the United Kingdom Ziglu, which would prepare it for expansion in Europe.
Robinhood seems to be struggling with his struggles. However, the lawsuit will be closely watched and could result in a ruling that deals another blow to a company that has been trying to pick itself back up since last year.
