Robinhood hold liable to pay $29,460.77 to a 27-year-old truck driver

The new year couldn’t provide Robinhood a fresh start, leaving behind the insanity of the previous year. At the height of the frenetic short squeeze in January 2021, a 27-year-old truck driver from Connecticut gave Robinhood (HOOD) a taste for restricting trade.

A financial industry regulatory authority moderator ruled on January 6 that Robinhood, a zero-commission trading platform, was liable to pay $29,460.77 in compensatory damages to Jose Batista. He is a retail investor and filed a complaint with the industry self-regulator in May alleging that Robinhood was restricted to trading.

The ruling is the first of its type, with Robinhood awarding money to a retail investor due to its trading limits. It could encourage other individual traders to seek compensation for the losses they suffered due to Robinhood’s decision.

The Securities and Exchange Commission looked into the charges against RobinHood and Citadel but found no evidence to back them up. The study concluded that retail traders’ coordinated activities, not shorts covering their positions, were the cause of the stock market’s rise.

As a result, Batista’s lawyer, Altamirano, avoided engaging in conspiracy theories concerning trade sanctions and instead focused only on his client’s case facts.

Altamirano said, “Finra has shown here that they are ready to make a decision on a case on merit.” “It opens the door for other investors to revisit that day” [in January] And maybe take action.

Batista’s case against the $13 billion online brokers was focused on the ban on his shares in headphone maker Kos Kos (down 4.90%), and fashion brand Express Inc. EXPR (down 1.97%) differed from the company’s whole portfolio.

“I remember that day, it was life changing for me,” Batista said in an interview with Marketwatch. “I was just day-trading, just trying to catch up.”

Gamestop (GME), which went 6.73% down on Monday, was one of the large meme stocks Batista indicated he was trading in.

He had no intention of selling them at the moment, even though he committed to selling the shares he thought were about to peak.

“My plan was to sell Kos and Express that day,” Batista said. “I had a lot, but no one could buy it.”

Kos closed at $58 per share on January 27, the day before Robinhood and other online brokers implemented trading limits, and Express finished at $9.55.

Batista, who at the time just had a Robinhood account, grew increasingly frantic to sell his shares in some bubbly meme stock, fully aware that buyers were eager to acquire them at a premium.

“He basically left me no other choice,” Batista said of Robinhood. “They were saying ‘You’re just stuck. If you want to sell it. Sell it.'”

Kos closed at $35, and Express closed at $5 on February 1, the day when Robinhood resumed trading.

“It was difficult to watch,” Batista admitted.

FINRA agreed that Batista’s experience was too harsh to be entirely fair public intermediary based in Connecticut, John James McGovern Jr wrote in his discovery Robinhood’s two divisions, Robinhood Markets and Robinhood Financial, were “jointly and severally liable” for Batista’s losses, unlike seven other retail investors who have so far taken their complaints to the regulator.

Robinhood’s stock has plummeted since its July IPO, owing to increased competition and persistent concerns that the SEC will pay for order flows in 2022, threatening a large part of its business model. HOOD was trading at $15.55 when writing, down by 0.38%. In Monday’s trading session, it closed trading at $15.61, losing $0.28 in its price value.

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