- A Miami district courtroom dismissed the retail-investor lawsuit towards Robinhood and Citadel Securities.
- The lawsuit claimed the 2 corporations conspired to halt meme-stock buying and selling on January 28.
- The district courtroom decide mentioned the conversations could also be “suspicious” however not sufficient to show wrongdoing.
A federal courtroom in Miami dismissed a lawsuit Wednesday introduced by retail buyers alleging Citadel Securities and Robinhood conspired to halt meme-stock buying and selling in January.
The courtroom mentioned the proof of a conspiracy between market-maker Citadel Securities, buying and selling app Robinhood, and others, to trigger shares of meme shares like GameStop to say no on January 28 was not adequate.
In September, the retail buyers suing the businesses submitted new proof of their grievance that exposed conversations between Citadel Securities and Robinhood within the days main as much as the buying and selling halt.
“Excessive degree staff of Citadel Securities and Robinhood had quite a few communications with one another that point out that Citadel utilized stress on Robinhood,” the lawsuit mentioned.
However these conversations didn’t persuade the District Courtroom of Southern Florida.
“Admittedly, these emails could also be considerably suspicious given the members and their timing,” Chief US District Choose Cecilia Altonaga wrote. “However are a couple of obscure and ambiguous emails between two corporations in an in any other case lawful, ongoing enterprise relationship sufficient to ‘nudge [Plaintiffs’] claims throughout the road from conceivable to believable[?]’ The Courtroom thinks not.”
In an emailed assertion, a Citadel Securities spokesperson mentioned, “We’re happy that the courtroom agreed that there isn’t any foundation for the plaintiffs’ conspiracy theories and summarily dismissed the case.”
A number of legal professionals representing retail buyers didn’t instantly reply to Insider’s request for remark. Retail buyers have till December 20 to file a ultimate amended grievance.
When the conversations have been revealed in September, the hashtag #CitadelScandal trended on Twitter amid renewed outrage from retail merchants. Citadel Securities fired again on Twitter saying retail merchants concocted an “absurd” story.
“Web conspiracies and Twitter mobs attempt to ignore the details, however the reality is that Citadel Securities was the pre-eminent market maker to the retail brokerage neighborhood in January 2021,” the corporate wrote.
Along with lawsuits introduced by aggrieved retail buyers, the January buying and selling halt prompted a report from the US Securities and Change Fee in addition to Congressional hearings wherein Robinhood Chief Govt Officer Vlad Tenev and Citadel Securities CEO Ken Griffin testified. Robinhood additionally made modifications to its platform, including round the clock cellphone assist and nixing a well-liked confetti characteristic.