By: April Carson
After using FINRA's arbitration service to file a complaint, investment professional Jose Batista was compensated almost $30,000 from Robinhood. His case might have a lasting influence on other retail traders who are still furious about the trading platform's behavior in January 2021.
On January 28th, Batista was going to sell his Koss and Express stock — but Robinhood had placed trading restrictions on them, limiting the quantity of shares its users could purchase. As a result, Batista was forced to watch as the prices of his stock plummeted to nearly half of what they were the day before the restrictions went into effect, according to MarketWatch. “Seeing it fall and fall made me feel terrible, then I felt helpless,” Batista told Motherboard.
The increased number of trades generated by GameStop's stock, which were partly driven by retail investors, was the reason behind Robinhood's limitations. In January 2021, consumers of the Wall Street Bets subreddit hyped up the company, and its stock rose dramatically in value. This eventually resulted in widespread market-wide trade pauses and, at certain brokerages, apparent technical difficulties. Robinhood, for example, limited GameStop as well as other stocks such as AMC, Blackberry, Koss, and Express.
Robinhood users were unable to purchase any shares of the top meme stocks because of trading bans. It also severely limited the number of stocks its users could buy in other firms, at one point allowing customers to only invest in Express if they had fewer than five prior positions. You were only allowed to buy a single share of Koss. Dozens of user complaints, review bombs, and even Congressional attention resulted from the freeze. According to MarketWatch and Batista's lawyer, however, most of the other lawsuits and investigations have fizzled away.
Batista's win was not explained by the arbitrator. Batista's lawyer, on the other hand, offered a rationale for his success where others had previously failed: because the lawsuit concentrated on "Robinhood's" inadequate liquidity management practices and monitoring of its counterparty risk." The post also says that they “attacked, head-on, the notion that Robinhood’s customer agreement gives it unfettered right to restrict trading for any reason, at any time.”
The case could be a blood bath to other traders. While arbitral decisions do not have legal force, Batista's lawyer advised other Robinhood users to contact the company in an effort to persuade them. Several threads on stock-related forums have already noted the notion that the situation might be utilized as a lesson to try and obtain compensation from Robinhood.
Furthermore, the arbitrator ordered Robinhood to pay almost a year's worth of interest on the money in addition to the $29,460.77 in losses Batista will receive. In addition, Robinhood must pay costs associated with filing and other expenses.
There is no evidence that Robinhood and its related firms are connected in any way to Dukascopy, which is the subject of this dispute. Those two parties are Robinhood Securities and Robinhood Financial, the parent company of which is named in the claim. Both are members of FINRA, although the parent business is not — thus the decision applies to both Robinhood's legal entities.
GameStop's stock, on the other hand, did not cause the trade limitations. It was not what Batista filed a complaint about. According to MarketWatch, Batista owned GameStop shares but had no intention of selling them at the time. According to Motherboard, some Redditors have advised him to invest his winnings in GameStop instead of spending it, but he plans on using the money from his trip to pay for childcare and expand his trucking company.
For Batista, it appears to be a good conclusion to the tale — perhaps he'll be portrayed in one of the bajillion movies, documentaries, and TV shows about the GameStop/WallStreetBets bonanza.
Ask A Free Question to Psychic Medium Cortney Kane Sides
---------------
About the Blogger:
April Carson is the daughter of Billy Carson. She received her bachelor's degree in Social Sciences from Jacksonville University, where she was also on the Women's Basketball team. She now has a successful clothing company that specializes in organic baby clothes and other items. Take a look at their most popular fall fashions on bossbabymav.com
To read more of April's blogs, check out her website! She publishes new blogs on a daily basis, including the most helpful mommy advice and baby care tips! Follow on IG @bossbabymav
-------------------
LOOKING TO INVEST IN 4BIDDENKNOWLEDGE? CLICK HERE TO MAKE A CONTRIBUTION AND GET INVOLVED WITH 4BIDDENKNOWLEDGE TV AND BECOME PART OF THE MOVEMENT!
CLICK THE LINK TO INVEST
GET YOUR BOOK TODAY!
