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Event

January 2021 short squeeze trading litigation

Private lawsuits by retail investors over the brokers' purchase restrictions of 28 January 2021, gathered in one federal case in the Southern District of Florida; the Eleventh Circuit upheld two dismissals, in 2023 and 2024.

3 links, 3 backed by primary records

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Dates
2021 – 26 Jun 2024
Also known as
In re January 2021 Short Squeeze Trading Litigation, MDL 2989

Lawsuits over Robinhood trading restrictions of 2021, brought against Robinhood Markets and, in the antitrust case, Citadel Securities.

Connections 3

involved

  • Robinhood Markets defendant; the Eleventh Circuit affirmed the dismissal of the state-law claims (10 August 2023) and of the antitrust claim (26 June 2024) Primary record 12

    The 2023 opinion says Robinhood's customer contract gave it the right to restrict trading, and that it had no tort duty to avoid purely economic loss.

  • Citadel Securities defendant in the antitrust class action; the court affirmed its dismissal without deciding whether an agreement was alleged Primary record 2

    Plaintiffs alleged a conspiracy between Robinhood and Citadel Securities. The defendants rejected it. The Eleventh Circuit decided only that the complaint did not plausibly allege an unreasonable restraint of trade.

caused by

Timeline 1 date
  1. 2021 – 26 Jun 2024 January 2021 short squeeze trading litigation
Proof 2 sources
  1. In re January 2021 Short Squeeze Trading Litigation (Juncadella v. Robinhood Financial LLC), No. 22-10669, opinion of the Court of Appeals for the Eleventh Circuit, U.S. Court of Appeals for the Eleventh Circuit, 10 Aug 2023. Primary record
    Whether in agency, contract, or tort, the plaintiffs’ amended master complaint did not adequately allege that Robinhood breached a state common-law duty. We AFFIRM the judgment of dismissal.
    Some Robinhood customers who could not buy the restricted stocks brought this putative class action, seeking to represent both Robinhood customers and all other holders of the restricted meme stocks
  2. In re January 2021 Short Squeeze Trading Litigation (Guzman v. Robinhood Markets, Inc.), No. 22-11873, opinion of the Court of Appeals for the Eleventh Circuit, U.S. Court of Appeals for the Eleventh Circuit, 26 Jun 2024. Primary record
    Plaintiffs’ complaint fails to state a claim because it does not allege anticompetitive effects in a relevant market defined by the Amended Complaint, and therefore does not allege an unreasonable restraint of trade.
    Defendants reject Plaintiffs’ conspiracy allegations and argue that Robinhood implemented the restrictions on its own accord to reduce market volatility and thereby reduce its collateral requirements with the National Securities Clearing Corporation
    Because this failure is dispositive of their claim, we need not decide whether Plaintiffs plausibly alleged an agreement between Defendants to prohibit purchases of the relevant securities.
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