Lawyers Jeff Kwatinetz and Sean Burstyn of The Ferraro Law Firm discuss the lawsuit, which argues that Robinhood was “looking for Wall Street hedge funds” at the expense of his clients.
Robinhood is facing collective action after restricting negotiations on several actions, including GameStop and AMC, two weeks ago.
“Robinhood knew that its shares would result in the fall of restricted stock prices,” says the lawsuit, filed by The Ferraro Law Firm, in part. “In doing so, they sought out Wall Street hedge funds at the expense of individuals who were Robinhood customers.”
“Robinhood is restricting titles like GME [GameStop] of its platform to slow growth and help benefit individuals and institutions that are not Robinhood customers, but are major institutional investors or potential investors in Robinhood ”, says the process.
Robinhood did not return FOX Business’s request for comment.
This lawsuit is unrelated to a lawsuit filed by the family of Alex Kearns, a 20-year-old who committed suicide last year who mistakenly thought he lost more than $ 700,000 in a risky bet on Robinhood.
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Jeff Kwatinetz and Sean Burstyn, lawyers for The Ferraro Law Firm, are representing the plaintiffs in the lawsuit. Burstyn said Robinhood “turned his back on his customers” by placing restrictions on negotiations.
“This case is about Robinhood having exposure to GameStop shares and, when that happened, it basically collapsed,” said Burstyn on Monday in “Mornings with Maria”, adding that he believes a clause the company is using to defend his actions would not be sustained in court.
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“After everyone suffered, they said, well, there is a clause that says, ‘We can make some adjustments here and there.’ It was not covered by that provision at all, ”said Burstyn.
“And if that provision were used in a court to exempt Robin Hood from liability for his gross negligence, I don’t believe that any court would accept that,” he added. “And I can say, as a lawyer, that would be inconsistent with applicable law.”
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Kwatinetz added that he believes the company “built a platform that was designed to fall” and was not responsible for its role in the market.
“[Robinhood] came with all this ‘Let’s democratize and give access to millennials and young people’, ”said Kwatinetz to Maria Bartiromo. “They didn’t take responsibility when it comes to something like that.”
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Kwatinetz added that the damages sought in the process could be “in the billions”. “We still have a long way to go to find out exactly, you know, how many people were affected,” he said.
FOX Business’ David Aaro contributed to this report.