Robinhood conspired with the big Wall Street hedge funds to screw over the everyday folks who are suddenly striking it rich with investments like GameStop … according to a new lawsuit.
The free-trading app just got hit with a class action lawsuit filed in federal court … one day after Robinhood barred retail investors from continuing to buy stock in several companies in the battle between Reddit bros and hedge fund managers.
Melvin Capital and Citadel, 2 massive hedge funds, are also being sued … as the suit claims they were shorting companies like GameStop and losing a lot of money as the stock prices went up. The allegation is the fund conspired with brokerages like Robinhood to block the purchase of certain stocks in order to stop their financial bleeding.
In the suit, filed by Larry Friedman and obtained by TMZ, a group of retail investors claims Robinhood’s move to shut down buyers caused prices to plummet in favor of the big hedge fund investors … while seriously hurting the finances of the little guys in the process.
The suit claims the problem isn’t limited to Robinhood and the hedge funds — Charles Schwab and TD Ameritrade are also being sued.
The little guys are going after the Wall Street fat cats for at least $5 million in damages.
Friedman tells TMZ, “Trading rules must be the same for everyone no matter how big or small your investment is. There is no room for bullying or manipulation in the market. Thankfully, the courts are still the best place to find justice.”