After retail investors decided to play the game Wall Street has played for years, some online brokerage apps tried to take matters into their own hands. The popular stock trading app Robinhood blocked users from buying or trading stocks that became popular on social media platforms like Reddit after these stocks saw significant rises in the market. As a result, a class-action lawsuit has been filed against the app for “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise, thereby deprived [sic] retail investors of the ability to invest in the open-market and manipulating the open-market.”
The block came Thursday after hedge fund investors lost millions and complained that share prices were driven by YOLO investors for stocks like GameStop, AMC, and Nokia. Earlier this week, users of r/WallStreetBets encouraged users to buy stocks of struggling companies to work together to drive up the prices traditional hedge funds had shorted. Through these efforts, the buying frenzy increased stock value for these companies by over 100%. But after Robinhood’s move Thursday, users could only close existing trades and purchasing new shares was disabled. As a result, values began to slide.