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Robinhood Trading App Sued for Market Manipulation

The Robinhood trading app is set to stand trial in the U.S.

By Mike Hesp
• 2 min read
Robinhood Trading App Sued for Market Manipulation

The trading app Robinhood is set to stand trial in the U.S. It’s about market manipulation during the meme stock rally.

Robinhood faces a lawsuit in the U.S. for market manipulation. The press agency Reuters reports this and cites a ruling from a Florida court.

The judge gave the green light for a class action lawsuit brought by Robinhood's customers in the wake of the meme-stock rally. Last year, the prices of distressed stocks like GameStop or AMC jumped. The reason was a clash between retail investors and hedge funds. The latter bet on a falling stock price, but small investors pushed the price up with trades coordinated on social media, delivering Wall Street a heavy blow.

In the midst of this stock market saga, Robinhood temporarily halted the buying feature for those stocks. Retail investors suspected market manipulation and collusion with the hedge funds. The case is now being heard in court.

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