Miami lawyers sue stock app, finance giants over GameStop trading
A well-known Miami law firm is getting in on the backlash against stock trading app Robinhood, filing a lawsuit that accuses it of illicitly halting trading in shares of GameStop last month.
The suit, filed by personal injury attorneys The Ferraro Law Firm, P.A. along with attorneys Jeffrey Kwatinetz and Sean Burstyn, alleges Robinhood acted in bad faith, violated securities law statutes, and “manipulated” its users by preventing them from buying shares in GameStop as prices soared in a wave of speculative bidding.
The suit also names Connecticut-based hedge fund Point72 and Citadel Securities, the market-making unit of finance group Citadel — owned by Miami resident Ken Griffin — as defendants. It accuses them of engaging in a conspiracy with Robinhood to protect a third financial group, Melvin Capital, which had bet heavily against GameStop. Melvin is owned by Gabriel Plotkin, who recently purchased properties on North Bay Road in Miami Beach for $44 million; he is not named as a defendant.
“Who’s getting screwed? The common guy, the little guys sitting out there trading,” founding shareholder and president Jim Ferraro said in an interview.
The suit, filed Feb. 3, seeks unspecified damages and a jury trial on behalf of multiple plaintiffs.
In a statement, Point72 said: “The allegations against Point72 are baseless. Point72 had no involvement in Robinhood’s or any retail broker’s decision to limit or restrict trading in any security, and never asked or pressured any retail brokerage firm to restrict trading in any security.”
Citadel Securities said in a statement released Jan. 28 that it “has not instructed or otherwise caused any brokerage firm to stop, suspend, or limit trading or otherwise refuse to do business. Citadel Securities remains focused on continuously providing liquidity to our clients across all market conditions.”
Robinhood did not respond to requests for comment.
This story has been updated to clarify that the lawsuit names Citadel Securities.
This story was originally published February 11, 2021 at 7:00 AM.
