What You Need to Know
- A FINRA arbitrator ruled in favor of an investor who alleged he lost money due to trade restrictions Robinhood placed on GameStop and other stocks last year.
- The 27-year-old truck driver, who invested in shares of Koss and Express, alleged he suffered investment losses as a result or Robinhood's action.
- Robinhood declined to comment on the arbitrator's decision.
A Financial Industry Regulatory Authority arbitrator has ordered Robinhood to pay $29,460 in compensatory damages, plus interest and fees, to an investor who alleged that he suffered investment losses as a result of the robo-advisor’s decision to restrict trading on GameStop and other select stocks last year in reaction to trading frenzy surrounding the stocks.
Robinhood declined to comment on the decision Friday.
The company was already the subject of multiple lawsuits that made the same allegations.
For example, a class-action complaint filed Feb. 4, 2021 in U.S. District Court for the Northern District of California, alleged it and several brokerages, fund companies and clearinghouses “conspired” to prevent retail investors from buying stocks like GameStop, thereby “stripping them of their rights to control their investments.”
In the FINRA arb case, Jose Batista, a 27-year-old truck driver who invested in shares of headphone maker Koss and retailer Express, allegedly suffered investment losses as a result of Robinhood’s action.