Investors who experienced losses in the January 2021 short squeeze have criticized Robinhood for the demands for data they have made, as the multi-district legal proceedings against the company remain ongoing in the Southern District Court of Florida.
Recently, Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC put forward a Memorandum of Discovery in regard to a collection of Requests for Production directed to Plaintiffs in a federal securities lawsuit.
The two sides have not been able to reach an agreement on three demands.
- The first demand strives to obtain “all Documents, Communications or Social Media Posts associated with Robinhood or this Action.”
- The second demand calls for “documents that are sufficient to recognize all of the plaintiffs’ investments, investments, and transactions in any securities other than the applicable Securities in the given Time Period.”
- The third demand requires certain schedules from the Plaintiffs’ income tax returns for the last three years. The plaintiffs have argued that Robinhood’s requests should be rejected.
The plaintiffs have agreed to extend the time period of relevant documents up to June 5, 2021, while Robinhood insists that documents after March 5, 2021, have no relevance to the case.
The traders believe that the request for Plaintiffs’ tax returns is a tactic to harass and intimidate them, rather than for any real purpose. They argue that Robinhood has not offered any meaningful explanation for why it requires this information more than two years after the events and trades in question occurred.
The plaintiffs assert that Robinhood’s demands for unrelated documents, which it was willing to waive, should be refused. The Consolidated Class Action Complaint (CCAC) presents two causes of action:
- The first is that Robinhood manipulated the prices of the Affected Stocks in breach of section 9(a) of the Securities Exchange Act of 1934.
- The second is an identical theory stemming from section 10(b) and the rule 10b-5 issued under it.
In August 2022, Lead Plaintiff Blue Laine-Beveridge, along with named Plaintiffs Abraham Huacuja, Ava Bernard, Brandon Martin, Brendan Clarke, Brian Harbison, Cecilia Rivas, Garland Ragland Jr., Joseph Gurney, Santiago Gil Bohórquez, and Trevor Tarvis, submitted a Consolidated Class Action Complaint, to which Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC had to respond. The Court partially dismissed the complaint but left the majority of the claims in place.
On September 12, 2022, the respondents filed their answer to the Complaint, denying all allegations, including the Table of Contents, headings, sub-headings, footnotes, and non-numbered paragraphs. Robinhood’s answer also included 22 affirmative defenses.
The Discovery Hearing originally scheduled for March 3, 2023, was rescheduled for March 10, 2023, at 11:30 A.M. in the Miami Division before Magistrate Judge Melissa Damian.
