Robinhood Users Suing Over Trade Limits Face High Legal Bar

Experts say brokerages get wide power to restrict transactions
Suits claim losses from blocked access amid share-surge frenzy

Watch: Vlad Tenev, co-founder and chief executive officer at Robinhood Markets, discusses why he decided to restrict buying on 13 securities on the platform, the criticism he and the platform have endured and his business strategy. (Source: Bloomberg)

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By Chris Dolmetsch, Christopher Yasiejko, and Christian Berthelsen

January 28, 2021 at 11:47 AM EST

Updated on

January 28, 2021 at 10:02 PM EST

This article is for subscribers only.

Frustrated investors who sued after getting locked out of trading in frenzied shares like GameStop Corp. aren’t likely to have much luck in court either.

Online brokerage Robinhood Markets was named as a defendant Thursday in several federal suits demanding it reinstate trading of shares including GameStop, BlackBerry Ltd., Nokia Oyj and AMC Entertainment Holdings Inc. Just hours earlier, Robinhood, Interactive Brokers and others took steps to curtail activity in the high-flying stocks after several dizzying days of trading on their platforms whipped up volatility.

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