Robinhood Ordered to Pay Trader $30,000 for Meme Stock
- A Robinhood trader has received significant compensation after filing a lawsuit against the company
- Arbitrator orders trading app to pay out over $30,000 after freezing trades following massive Reddit move
- Learn more about the GameStop saga here
It’s been almost a year since we were treated to one of the craziest internet sagas in recent memory thanks to the WallStreetBets subreddit, which sparked a trading frenzy after an army of retail investors banded together to try to spoil the plans of a hedge fund that had shorted the company’s shares.
Many of these amateur traders flocked to Robinhood to get in on the action, and the company soon found itself caught in the crossfire after temporarily halting transactions from GameStop and other “meme stocks” after scrambling the way to manage the cash flow problems encountered. due to the influx of new users.
This development obviously didn’t sit well with people who suddenly found themselves unable to capitalize on their positions, and Robinhood soon found itself the recipient of dozens of class action lawsuits filed on behalf of the investors who got screwed.
Last June, the Financial Industrial Regulatory Authority fined Robinhood an unprecedented $57 million, of which $12 million was earmarked to compensate users affected by the company’s unsavory business practices. At the time, it was unclear how many people could benefit from the fund, but at least one person has already received a literal refund.
According to MarketWatch, which could potentially be the first of many dominoes to fall earlier this month after an arbitrator handling a FINRA complaint filed by Jose Batista determined the 27-year-old Connecticut truck driver was entitled to 29 $460.77 in compensation from Robinhood.
It should be noted that his main focus was the losses he suffered after being unable to trade Express and Koss stock (he had GameStop on his wallet but admitted he had no intention of selling), but there’s a chance it could set a precedent that could be very bad news for Robinhood.
If you believe you are entitled to a similar payment, you can file a complaint with FINRA here.