back to article Lawsuit accusing Robinhood and Citadel Securities of colluding to stop GameStop shares from skyrocketing thrown out by judge

A federal judge dismissed the proposed class-action lawsuit accusing retail brokerage biz Robinhood of colluding with trading firm Citadel Securities to prevent people from purchasing GameStop and other so-called meme stocks, earlier this year. Share prices from the likes of GameStop, AMC Entertainment Holdings, BlackBerry, …

  1. Pascal Monett Silver badge

    But RobinHood did block buying Gamestop

    With no good reason and in contradiction with its stated goal of allowing its users to buy stock.

    Brokerage firms are not entitled to choose which stocks they let their customers buy. Shouldn't there be sanctions for that ?

    1. Anonymous Coward
      Anonymous Coward

      Re: But RobinHood did block buying Gamestop

      If it can be proven, yes.

    2. Anonymous Coward
      Anonymous Coward

      Re: But RobinHood did block buying Gamestop

      "Brokerage firms are not entitled to choose which stocks they let their customers buy."

      Brokerage firms are absolutely entitled to make whatever decisions they like* about what stocks or trading facilities they provide to their customers.

      As in any commercial arrangement, if the customer doesn't like the service on offer they are free to take their business elsewhere.

      Just to pre-empt the wah-wah of "but citadel stop them trading anywhere it's sooo unfair", there are plenty of firms who are happy to take citadel on and will trade against them all day long and will take order flow from customers to support that.

      * Source - I used to run a brokerage

      1. Anonymous Coward
        Anonymous Coward

        Re: But RobinHood did block buying Gamestop

        "* Source - I used to run a brokerage"

        The fact that you are or used to be involved in the immoral abuses of the stock markets and the fact that they are TECHNICALLY legal maneuvers does not change the fact that they are the disgusting acts of very slimey and greedy people who don't care about the customer one whit.

        If you want to see how relevant the law is to morality in the US, just take a look at the fact that some clown wandered into a crowd with a loaded AK-47 and was allowed to plead "self defense" for KILLING someone who "shoved" him. There IS no "morality" or "decency" under US law; only EXCUSES for the guilty to get away with what they've done.

        1. Jellied Eel Silver badge

          Re: But RobinHood did block buying Gamestop

          The 'clown' didn't have an AK-47, didn't wander into a crowd, and was found not guilty on all charges. And now he and his lawyers might sue a lot of media and individuals for slander and libel.

          But such is politics, and the sad state of our media. But I guess that's also true in this case. So dismissed because there was no case. Selling order flow may be rather scummy, but isn't illegal, neither are placing limits or restrictions by a retail brokerage. To me, there was a lot of hype from the media that turned the whole thing into a bit of boiler room job.

          1. Anonymous Coward
            Anonymous Coward

            Re: But RobinHood did block buying Gamestop

            Er, under Canadian law, wandering out into the street with a loaded rifle at ALL would have you surrounded by police. I'm talking about the insanity of the US "justice" system, which apparently considers it a "reasonable use of force" to shoot someone with a rifle for shoving them and trying to defend THEMSELVES from the nutbar with a rifle in their midst.

            Apparently you didn't read the same articles I did from UNBIASED sources like the BBC and CBC and ABC (Australian, not American.) I trust the American media as far as I can spit.

            1. desmo

              Re: But RobinHood did block buying Gamestop

              America is in a death spiral. Rittenhouse got found not guilty because the law is designed to protect white people who shot blac and brown people, and their supporters. Looking from Australia it's incomprehensable that people are allowed to carrt military weapons on the street. I'll never ever vists their again. too dangerous.

              As for stock trading - anybody knows it's just gambling and rigged towards the brokers and professional traders. the mug punters shoudl realise that. Just like the self defence laws it's made to benfit one side .. the rich white people.

              1. casaloco

                Re: But RobinHood did block buying Gamestop

                The people he shot were WHITE.

                Well known dangerous WHITE criminals with long histories of violence.

                White criminals who simply came out for a night of looting and destruction for fun and profit.

              2. Jimmy2Cows Silver badge

                Re: But RobinHood did block buying Gamestop

                Rittenhouse is white. The people he shot are white.

                No black people were involved in the Rittenhouse shootings. Yes, it happened during BLM protests, but that's the only racial connection and it's pretty tenuous. Let's not conflate facts and hyperbole please.

                Attacking anyone who's carrying a loaded weapon, especially in the US, is stupid at best, at worst it's outright suicidal.

                As a non-US resident it is indeed hard to believe people can carry firearms in public, but that's allowed by US law in some states. Call it a crazy law by all means, but Rittenhouse and who he shot is not a race issue. Regardless of when and where it happened.

            2. beast666

              Re: But RobinHood did block buying Gamestop

              "Apparently you didn't read the same articles I did from UNBIASED sources like the BBC and CBC and ABC (Australian, not American.)"

              You need to wake your ass up. Bam

            3. Clunking Fist

              Re: But RobinHood did block buying Gamestop

              "I'm talking about the insanity of the US "justice" system, "

              Err, in this case, the US Justice system upheld American law, which specifically allows citizens to carry guns*. The fact that you and I are startled by the thought of an armed populace, in no way overrides US Law.

              (*Varies by state and criminal record of the individual.)

          2. Malcolm Weir Silver badge

            Re: What's the problem?

            The clown did have an assault rifle (although not an AK-47), and if the murdering asswipe does try to sue for "slander and libel" (or "defamation", as people who know what they're talking about call it), he'll discover that before his sacred Second Amendment there is a First Amendment, which absolutely allows people to call a murderer a murderer, even if not convicted of the crime of murder. For example, I can say that OJ Simpson murdered his ex-wife with impunity, because it's a statement of opinion based on disclosed facts.

            If I were to sale that the clown was convicted of murder, that would be false. But he did murder people, and was acquitted based on a pretty poor prosecution and a massively deferential "self-defense" statute. We can argue about whether the latter is a good thing, but the former is just a screw-up from people who should know better. Oh, and the judge is a partisan hack, which is also not defamatory for the same "statement of opinion" reason -- although the judge is evidently disappointingly ignorant of the First Amendment!

            Incidentally, the problem with monkeying with the self-defense statute is that it usually benefits people who _should_ be acquitted, for example domestic violence victims.

            1. Jellied Eel Silver badge

              Re: What's the problem?

              Well, for a start there were plenty of people who called Rittenhouse a white supremacist. There was also the Independent, which reckoned he shot 3 black people. Or the prosecutor, who seemed to think that being armed means you cant use those arms in self-defence. Or that going to help protect property is bad, and armed protestors should be allowed to riot in peace. So thanks to the media, you can hold the view that this was murder. Trial and verdict disagrees, but such is politics.

              There was no (successful) monkeying with self-defence statute, because the prosecutor's attempt to do that failed.

              1. veti Silver badge

                Re: What's the problem?

                Openly carrying a gun into a riot - is just fucking stupid. Of all the people now feting Rittenhouse as a hero, I'd like to ask them - would you encourage your kids to do that?

                But, apparently, state law protects people who do that kind of thing.

                What I'd like to see is a parallel case where one of the mob successfully hit and killed the lunatic with the gun. Because as far as I can see, they could use exactly the same defence in law.

                1. Jellied Eel Silver badge

                  Re: What's the problem?

                  You could argue that not carrying a gun in a riot is stupid. Personally I think the best thing to do in a riot is steer well clear of it, and certainly not stand post solo. But there'd been serious rioting in the 'fiery but mostly peaceful' town.

                  But as with RobinHood and it's flash mob, the media arguably influenced events. With Rittenhouse, that became the 'white supremacist murderer' meme, and didn't look at the background. One event that stood out for me was who fired first? That turned out to have been Joshua Ziminski, who fired a shot as Rosenbaum was chasing Rittenhouse, and Rosenbaum was then shot. So Ziminski was the first 'active shooter', and was later charged with misuse of a firearm and arson. Arguably that was kind of a 'yelling fire in a crowded theatre' moment that escalated the situation. Rittenhouse was charged with reckless endangerment, which IMHO was a charge that should have been brought against Ziminski.

                  And then there was the prosecutor's star witness, Grosskreutz, who was illegally carrying a firearm and was shot after pointing it at Rittenhouse. I don't know if the prosecutor did a deal in exchange for testimony. But a very messy situation with multiple armed people travelling to Kenosha and violating the curfew order.

                  Personally, I rather like the UK approach. Don't take firearms to a riot, and if you do, it makes it easier for AFOs to identify criminals.

                  1. remerson

                    Re: What's the problem?

                    Well as usual, people don't like the facts to get in the way of their opinions. And as this so highly charged, the online media do all they can to keep people away from those facts and onto something more emotive.

                    Let's be clear here. I'd say America has a race problem. And a gun problem too. What exactly you define those problems as, I'll leave to you. But I'm not American. The former led to a situation where the latter came into play.

                    So a 17 year old ends up walking the streets with an assault rifle. And other people with guns do the same. That's all good fun until a few people get shot. If that's not a Darwin Award, I'm not sure else qualifies. Rittenhouse could well have been killed. I believe that. To me, that doesn't make him a hero only stupid for getting into that situation in the first place. However, stupidity isn't a crime even if it can end up getting you killed.

                    Not taking a gun to a riot is good advice. In fact, not taking a gun into urban places without being a professional is even better. But people can be relied upon not to follow good advice. And God damn the man who tries to deprive an American of his lawful right. Even if it does get him killed. Because to some Americans that right is more important than the sanctity of life itself. At least until it's your child who takes that bullet. Although I suspect most don't reach that last bit. At least, let's hope not.

              2. Anonymous Coward
                Anonymous Coward

                Re: What's the problem?

                People should stop reading the articles in the papers and actually read the court documents with all the evidence. Go off that, not what you read in the papers.

                I say this as someone who watched the whole Trayvon Martin court case. Listened to all the evidence. It was clear from the evidence George Zimmerman self defense argument was justified. He hadn't seeked out Trayvon Martin, Trayvon double backed on him, jumped him and was on top of George beating him, potentially to death, at which point George manager to get to his gun and fire. Been a while now but I think it was stated Trayvon also went for George's gun while he was on top of him. The only person that used a racial slur was Trayvon when he called George a "White cracker" when on the phone to his friend, before he jumped George.

                Obviously, none of it is nice but I was sick of the straight out arguments people would get into claiming (and they still do) that it was a racist attack and shooting and all ignore the evidence to the contrary.

                Anon as appears you get marked with the racist brush if you defend George's action.

                I can't comment much on the recent case as not looked at the evidence.

            2. Clunking Fist

              Re: What's the problem?

              Nick Sandman called and wants to tell you about the settlement he received from CNN for their defamation of him in the "Covington kids" saga.

              Many US legal commentators (i.e. lawyers) have opined that the Kinosha kid's situation is almost identical in the misrepresentations made by media/press and politicians. It is a shame that the US media class can't learn. They genuflected slightly after Covington, but then forgot all about the learnings.

              MSNBC even sent a journalist to tail the jury bus, in order to identify the jurors. What is the journalistic value of doing that?

              If your info about the Kinosha incident is sourced solely from mainstream or your social media bubble, then you missed out on many pertinent facts.

              When even screaming progressives like The Young Turks will admit that they lacked all the facts, and now accept that it was self defence, you need to take another look at the evidence.

              1. Malcolm Weir Silver badge

                Re: What's the problem?

                Re the Sandman settlement: we can confidently state that the settlement was in the region of $25K, as a mention of that figure was what got his lawyers all riled up (had the settlement been significantly higher, the lawyers would have acted differently, for example by releasing the higher number). $25K is "go away" money in an otherwise expensive legal action.

                However, those who try to assert that the asswipe in Kenosha was somehow innocent or even virtuous are missing a critical part: the same defense that he used could have been applied to someone who shot him. That's the bottom line: under the pro-gun "self-defense" statutes in Wisconsin (and many other states), if a bunch of idiots have guns, it's not a crime if some or all of them get shot!

                The real tragedy is that the sort of statutes that _should_ protect against the idiocy exhibited by the murderous asshole ("reckless endangerment" or some such) are hamstrung by gun nuts who insist that wandering around an urban area openly carrying a gun is ever a good idea.

                So the moral of the story is that if you see a vigilante thug on the streets during a civil disturbance, shoot the f*cker immediately before he gets a chance to shoot you, and you'll be fine...

                As to whether the dirtbag was or was not a white supremacist, there are two arguments that suggest that calling him one was protected opinion based on disclosed facts: first is that he hung out with overt supremacists in a bar back in January; granted, this is not proof, but it is evidence, and therefore someone could form an opinion based on that evidence. The second avenue is the killer's own social media and actions, which tied him strongly to "blue lives matter" and Trumpism in general, and again, it is entirely protected speech to conclude that someone in those camps is a white supremacist. The key issue is that "white supremacist" is an opinion, not a fact, because there is no finite definition of what the term actually means. To be clear, he may not have a racist bone in his body, but that's not relevant to the issue of whether it's defamatory to call him one.

                1. Jellied Eel Silver badge

                  Re: What's the problem?

                  You seem to be missing a few points with your whataboutery. You can't just shoot someone and then claim self-defence. You might if you were being attacked, or if someone pulled a gun on you. You also can't just shoot someone because they were a convicted paedophile.

                  I'm also puzzled why you think calling someone a white supremacist isn't defamatory. Or why you think being a Trump supporter also makes you one. Or even why supporting law enforcement. Or the 'ok' thing, which presumably means all divers are racist. Then again the far-left does rather overuse the race card, possibly overcompensating after old-world Democrats like Robert Byrd.

                  1. Malcolm Weir Silver badge

                    Re: What's the problem?

                    Oh dear, poor Eel...

                    Your woeful distortion of reality is sad, but I'll try to help you: if we accept that the asswipe was justified in murdering people because he was scared and they had (or may have had) weapons, we can _also_ accept that it would not be unreasonable for someone else to be scared of asswipe with his assault weapon, and shoot him. It's really quite simple: what's sauce for the goose is sauce for the gander. In fact, all that's needed to justify the shooting is an articulated reasonable fear (which is why your bizarre paedo reference is utterly irrelevant). Is it reasonable to decide that a stranger wandering around with an assault rifle may be up to no good? Evidently, yes, because that's the argument used to acquit asswipe of charges related to the shooting of the man who survived. Had that guy shot asswipe instead of the other way around, there is literally nothing you or any other apologist for daft gun laws could say to differentiate the two cases.

                    As to your puzzlement about defamation law in the USA, calling someone a "white supremacist" based on disclosed facts is not defamation: it's a statement of opinion. It may be wrong, but it's an opinion, and as such is protected by the First Amendment. I could go into a lot more detail about limited purpose public figure (i.e. asswipe) and actual malice (which is not malice), but we both know you have no interest in accuracy or facts, just in pushing your partisan hackery.

                    However, I will make a couple of points: asswipe was photographed hanging out with white supremacists and making a sign associated with white supremacists. It is therefore reasonable to form an opinion (which might be wrong, but it's an opinion) that he's a white supremacist.

                    Trump has made multiple statements indicating that he might be a white supremacist (whether it's true... oh, come on, it's obviously true), and therefore a Trump supporter might also be a white supremacist. Again, doesn't mean that they are, but someone forming an opinion based on those facts is fully protected by the First Amendment.

                    Sadly, ex-Eel, in your enthusiasm to demonstrate your misunderstanding of both self-defense and defamation law, you missed the key point in my last reply: how is "white supremacist" defined? And that's odd, because you touched on an important point: some on the more militant end of the political left wing _will_ "overuse the race card", which means that to that crowd it will mean something different from what you evidently think it means. I don't think it's hugely controversial to suggest that the term is sometimes used as a label for those who believe in the superiority of western civilization and culture even if they do have a black and/or Jewish friend...

        2. Anonymous Coward
          Anonymous Coward

          Re: But RobinHood did block buying Gamestop

          You need to read the case transcripts because you've been listening to a bad translation.

      2. Anonymous Coward
        Anonymous Coward

        Re: But RobinHood did block buying Gamestop

        That wasn't the judges ruling however. The plaintiffs claim was that (1) by not allowing GameStop shares to be sold Robinhood was engaging in a crime of market manipulation and (2) therefore the plaintiffs had the right to buy the shares to prevent the market manipulation, and even turn the tables.

        FYI - since you are apparently uninformed

        lalitigationlawyers dot com

        Stock Manipulation and Other Conflicts of Interest


        A “bear raid” manipulation occurs when an investor, broker/dealer, or other market participant uses option contracts to short sell a stock in a coordinated fashion ... Short selling can cross the line into prohibited conduct when it is done in a coordinated fashion in order to drive down a company’s stock by creating fear or panic in the market for such stock as a form of stock price manipulation.


        The problem with the plaintiffs case is firstly, that (1) has to be proven first, and that usually requires action by the DOJ, SEC, or CFTC. It seems as thought the plaintiffs were arguing that that (2) was de facto proof of (1), and furthermore that if (1) were true then (2) must be a justified claim. That a lot of conditionals to swallow at once, for a judge.

        The plaintiffs were only interested in (2) as an end goal, because that's the only way they could win damages. What they should have done is assembled evidence of blatant market manipulation, made complaints, and tried to move the DOJ, SEC, or CFTC into action. When and if that prosecution succeeded, then plaintiffs would have a base for civil damages, because the existing record of misbehavior would mean the judge would not say "no proof of manipulation", which is why THIS case failed. The case would then proceed to the next step, to determine if there were any liability, or not.

        1. Anonymous Coward
          Anonymous Coward

          Re: But RobinHood did block buying Gamestop

          Ah, hes, but they traders who brought this suit weren't sorting the stock, they were buying all they could get their hands on at the current price, which kept rising based on demand. The 'shorts' were the really big brokerages who were betting on Gamestop's demise. Their shorts exceeded their credit and they were forced to buy, at the higher prices, using even more borrowed money, to cover their short positions.

          What Robinhood did was to prevent trading on Gamestop to prevent the price from continuing to rise, as it most certainly would have; perhaps to the point that there wouldn't be enough outstanding shares at any price, to cover the short positions. Also, the buyers weren't planning on selling until the institutions with short positions collapsed.

          I believe (and would bet a dolalr) that discovery on this case would have exposed emails and/or phone calls between the short traders and Robinhood demanding that they stop trades in Gamestop.

          1. Malcolm Weir Silver badge

            Re: But RobinHood did block buying Gamestop

            Re: your bet.

            You may be right. But to get discovery, you need more than a "generalized suspicion", you need to evidence supporting that idea.

            John Nash (the "A Beautiful Mind" guy) won a Nobel for his work showing that two parties (here, Robinhood and the market makers) _can_ "cooperate" without ever interacting. This is how airfares get set across airlines and gas stations who don't price fix... (A drops the price and so starts attracting more customers, so B matches restoring the status quo, and now both A and B are worse off, so one decides to raise the price to recover their profit, and the other matches).

            To get discovery, you'd need, if not a smoking gun, at least some tangible evidence that a gun and smoke existed! And it might... but it also might not (e.g. if someone had a conversation on the phone...)

    3. Jason Bloomberg Silver badge

      Re: But RobinHood did block buying Gamestop

      With no good reason

      I would say stopping those who wanted to exploit suckers would be reason enough.

      It seemed to me those who wanted to exploit the suckers were the ones encouraging gullible people to buy the stock, hoping to leave them carrying the can when it all imploded.

      Maybe that's Evil Capitalism 101 but it didn't seem right to me. It feels rather karmic that those hoping to shaft others got shafted themselves.

      1. JohnG

        Re: But RobinHood did block buying Gamestop

        "It seemed to me those who wanted to exploit the suckers were the ones encouraging gullible people to buy the stock, hoping to leave them carrying the can when it all imploded."

        The stated goal of the chaps on the relevant reddit channel was to identify stocks where shorts had heavily oversold shares in certain companies, trying to push their value down. The idea was that if enough retail investors bought up the shares, the price would go up and the shorts would be forced to buy shares. Having sold far more shares than were in the market, the shorts would soon be competing to buy shares at any price. This worked with Gamestop and some hedge funds lost some serious money.

        There were moral and emotional elements in the choice of Gamestop - many in the reddit group were familiar with the company and felt it was wrong that a viable company should be pushed into the ground by the shorts.

        Robinhood and others lend/rent shares owned by their customers to shorts. By preventing customers from buying and allowing them only to sell, Robinhood were protecting the shorts at the expense of their trading customers.

        1. Toe Knee

          Re: But RobinHood did block buying Gamestop


          This just demonstrates who Robinhood's *real* customers are for those who didn't already realize.

    4. Persona

      Re: But RobinHood did block buying Gamestop

      With no good reason

      Its users were buying on margin and RobinHood couldn't raise the massive amount of short term capital needed to support this.

    5. Anonymous Coward
      Anonymous Coward

      Re: But RobinHood did block buying Gamestop

      Yes, but they didn't also write an email to each other say 'Hahaha our illegal scheme to collude together to prevent our customers buying Gamestop stock is working, here is the secret cash money bribe that we talked about' so it doesn't count as being illegal.

    6. ecofeco Silver badge

      Re: But RobinHood did block buying Gamestop

      The problem appears the case not properly presented, not that the thing didn't happen.

      Wording is important.

  2. the spectacularly refined chap

    I'm unclear as to how being unable to buy stock can lead to losses. Unless of course you were shorting the company yourself ...

    But no, a broker is perfectly entitled to refuse to trade in general. There are of course exceptions such as you having a nominee account but that governed by contract and generally wouldn't cover buying stock, just selling stock already in there.

    1. Anonymous Coward
      Anonymous Coward

      Because when someone sells, as in fills a buy order, the price goes down. When some one fills a buy order it goes up. If there are very few sell orders, putting in a buy order moves the price up with not too much money. If a large number of shorts (which there were, which is why they targeted these stocks) are on the stocks, pushing up the price will force margin calls, meaning the shorter must add more collateral, or have their position closed, in the casr of a short, buy back the stock, pushing up the price more, causing more margin calls, pushing it up even more. Now the price is extremely high, the ones that went long now sell / put in sell orders for the remaining margin calls / late investors to buy.

      With restricting only to fill buy orders (of non public buyers), they have limited it to only decreasing the price of the stock.

  3. veti Silver badge

    It's hard to argue that GameStop is still being widely shorted, but the price is still lower than it was when Robinhood suspended it. So anyone buying at that time would have lost money. As it is, the people who really lost money - apart from the funds that were invested in the shorts - were those who sold in the price crash that followed Robinhood's intervention. And nobody forced them to do that.

    GameStop now is obviously overvalued for a company with nothing resembling a survivable business plan. Which suggests to me that the successful stock manipulation has been the concerted effort to extract money from gullible and/or sentimental small investors by talking the stock up.

    1. teebie

      "GameStop annual gross profit for 2021 was $1.26B, a 34.01% decline from 2020.

      GameStop annual gross profit for 2020 was $1.909B, a 17.3% decline from 2019.

      GameStop annual gross profit for 2019 was $2.308B, a 7.11% decline from 2018."

      A bricks-and-mortar company making a billion a year in a pandemic doesn't need a new business plan.

      1. Throatwarbler Mangrove Silver badge

        "A bricks-and-mortar company making a billion a year in a pandemic doesn't need a new business plan."

        Let's apply similar logic to flight: "An airplane that's still high up in the air doesn't need to take steps to avoid crashing into the earth."

        Note the rapid rate of descent.

      2. veti Silver badge

        Gross profit means nothing. The actual accounts show that the company has been steadily losing money - by the old fashioned definition where you deduct costs before announcing "profit" - since well before the pandemic.

        1. teebie

          Thank you.

          net income figures shows that they have reduced their losses throughout the pandemic. Which implies they are doing something right. With their cash reserves of 1.75B it may be enough.

          GameStop annual net income for 2021 was $-0.215B, a 54.28% decline from 2020.

          GameStop annual net income for 2020 was $-0.471B, a 30.03% decline from 2019.

          GameStop annual net income for 2019 was $-0.673B, a 2039.48% decline from 2018.

  4. FlamingDeath Silver badge

  5. FlamingDeath Silver badge

    “I Like Money”

    - Frito

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