Robinhood Markets Inc. has scored another victory in its legal battles with customers upset about the brokerage’s handling of last year’s meme-stock trading frenzy.
A federal judge rejected a lawsuit filed by investors who lost money when the brokerage blocked the ability to purchase shares of GameStop Corp. /zigman2/quotes/203755179/composite GME +8.43% , AMC Entertainment Holdings Inc . /zigman2/quotes/200235402/composite AMC +2.51% and other hot stocks on Jan. 28, 2021. The suit accused Robinhood /zigman2/quotes/228268942/composite HOOD +4.93% of negligence and breaching various duties to its customers.
In a ruling dated Wednesday and released Thursday, U.S. District Judge Cecilia Altonaga of the Southern District of Florida sided with Robinhood.
The Menlo Park, Calif.–based company had sought to dismiss the suit, arguing that the investors had signed a customer agreement that gave Robinhood broad latitude to restrict trading in securities without prior notice.
“No doubt, plaintiffs were gravely disappointed when Robinhood suspended purchases of the meme stocks and their holdings declined in value,” Judge Altonaga wrote. “But the law does not afford relief to every unfulfilled expectation.”
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