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Attorneys Jeff Kwatinetz and Sean Burstyn of the Ferraro law firm discuss the lawsuit, which argues Robinhood “sought out Wall Street hedge funds” at the expense of its clients.
Robinhood faces class action lawsuit after restricting trading on multiple actions, including GameStop and AMC, two weeks ago.
“Robinhood knew his actions would cause the prices of the restricted stocks to fall,” part of the lawsuit, filed by the Ferraro law firm, reads. “In doing so, they were seeking out Wall Street hedge funds at the expense of individuals who were clients of Robinhood.”
“Robinhood restricts titles such as GME [GameStop] of its platform to slow growth and help individuals and institutions that are not Robinhood clients but are large institutional or potential Robinhood investors, ”the lawsuit said.
Robinhood did not return FOX Business’s request for comment.
This lawsuit is unrelated to a lawsuit brought by the family of Alex Kearns, a 20-year-old who committed suicide last year who mistakenly believed he lost over $ 700,000 in a risky bet on Robinhood.
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Jeff Kwatinetz and Sean Burstyn, lawyers for the Ferraro law firm, represent the plaintiffs in the lawsuit. Burstyn claimed that Robinhood “has turned its back on its customers” by imposing restrictions on trade.
“This case is about Robinhood having been exposed to the actions of GameStop, and when that happened it essentially had a meltdown,” Burstyn said Monday morning with Maria, adding that he believed a provision the company uses to defend his actions not hold out in court.
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“After everyone suffered, they said, well, there’s a provision that says, ‘We can make adjustments here and there.’ That was absolutely not contemplated by this provision, ”said Burstyn.
“And if this provision were used in a court to exonerate Robin Hood of liability for his gross negligence, I don’t believe a court would choose that,” he added. “And I can say, as a lawyer, that would be inconsistent with applicable law.”
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Kwatinetz went on to say that he believed the company “built a platform designed to break down” and that it was not taking responsibility for its role in the market.
“[Robinhood] came with this package “Democratize and give access to millennials and young people,” Kwatinetz told Maria Bartiromo. “They haven’t taken responsibility when it comes to something like that.”
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Kwatinetz added that the damages sought in the lawsuit could run into “billions”. “We still have a long way to go to determine exactly, you know, how many people have been affected,” he said.
FOX Company ‘ David Aaro contributed to this report.
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