The law firm Shumaker filed a class-action lawsuit in federal court in Tampa against the trading app Robinhood for preventing its members from trading GameStop shares on one day last week.
Why it matters: The suit — brought by Floridians Taylor Perry and Kevin Shehan, plus California native Ryan Heitz and more than 100 putative class members — seeks $5 million in damages and could change the way the commission-free stock trading app functions.
Background: Shares for GameStop closed at an all-time high — $445 per share — on Jan. 27, 2021. But the next morning, Robinhood shut down trading of the stock to its 10 million customers, citing market volatility.
- When those shares fell and then rose in trading the next day, Robinhood "chose to deny its customers access to the marketplace despite profiting off the customers who it lured in under the promise of market participation," said Shumaker's Michael S. Taaffe, who is representing the plaintiffs.
Flashback: Shumaker also sued Robinhood in March, when the trader was taken offline and investors left helpless during the biggest single-day point gain in the history of the Dow Jones Industrial Average.
This story first appeared in the Axios Tampa Bay newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.
