On March 23, 2021, Mark Milhouse (“Plaintiff”), individually and on behalf of all others similarly situated, represented by Eve -Lynn J. Rapp of Edelson P.C filed a putative class action against Robinhood Financial LLC (“Robinhood Financial”), Robinhood Securities, LLC (“Robinhood Securities”), and Robinhood Markets, Inc. (“Robinhood Markets”) (collectively, “Robinhood” or “Defendants”), seeking restitution, disgorgement, and punitive damages for allegedly manipulating users to achieve higher conversion rates and engaging users in risky investing practices. This case was filed in U.S. District Court in the Northern District of Illinois with Edmond E. Chang presiding.
The class definition, “Plaintiff Mark Milhouse brings this action pursuant to Federal Rule of Civil Procedure 23(b)(2) and Rule 23(b)(3) on behalf of himself and a class of all others similarly situated, this action has been brought and may properly be maintained as a class action against Robinhood pursuant to the provisions of Federal Rule of Civil Procedure 23.”
The Plaintiff alleged that, “In the weeks and months preceding January 28, 2021, he made dozens of orders through Robinhood’s platform, for which Robinhood profited from payments for order flow. On January 27, 2020, Plaintiff purchased shares of Nokia stock at $7.21 per share and at $7.43 per share. He also purchased shares of AMC stock at $16.26 per share and $19.40 per share. As Robinhood users took notice of AMC and Nokia’s share prices during the week of January 25, 2021, both stocks experienced exponential growth. However, immediately after Robinhood restricted its users from buying the stocks on January 28, 2021, the prices of both stocks went down. The stock prices decreased because Robinhood users were locked out of buying them, lost confidence in the market, and sold their shares in panic. Upon learning that he could no longer purchase shares in AMC, Nokia, or the other restricted stocks on January 28, Plaintiff immediately placed an order to sell his Nokia and AMC shares because there was panic in the marketplace over Robinhood’s trading restrictions, there was no explanation from Robinhood, and he believed that he needed to sell his shares in order to mitigate his impending losses”.
The Plaintiff further alleged that, “Robinhood’s restrictions created colossal panic, anger, and confusion among the retail investor community and did untold damage to the short-squeeze efforts that had taken place that week. As a result, Plaintiff’s long positions on AMC and Nokia were damaged, and Plaintiff lost the value of the shares he had purchased from Robinhood’s platform. He also lost an immeasurable investment opportunity that was stolen from him when Robinhood interfered with the markets and drove down the stock’s price.”
There are four claims for relief laid down by the Plaintiff, the first claim is for negligence because Robinhood’s business activity—which involves targeting inexperienced retail investors, and providing sophisticated and high-risk investment offerings like margin and options trading—is associated with an unusually high degree of financial risk. The second claim is for breach of fiduciary duty, the third claim is for unjust enrichment, and the fourth claim is for violation of California unfair competition law.
In his prayer for relief, the Plaintiff has requested the courts an order certifying the Class as defined above, appointing Plaintiff Milhouse as the representative of the Class, and appointing his counsel as Class Counsel, an award for Plaintiff and the Class for actual, compensatory, consequential damages, punitive and treble damages, as allowed for under the relevant laws, both pre- and post-judgment interest, and Such other and further relief that the Court deems reasonable and just.
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Disposed - Other Disposed
Property - Other Personal Property
Edmond E. Chang
Robinhood Markets, Inc.
Robinhood Financial LLC
Robinhood Securities, LLC
Eve-Lynn J. Rapp
Attorney at Edelson P.C.
2101 Pearl Street
Boulder, CO 80302
Status Report Requirements
DocketELECTRONIC Acknowledgement of case transferred to the Southern District of Florida as case 1:21-cv-21446, filed 04/15/2021. (ph, ) (Entered: 04/15/2021)[+] Read More [-] Read Less
Docket(#9) TRANSFERRED to the Southern District of Florida the electronic record (bg, ) (Entered: 04/13/2021)[+] Read More [-] Read Less
Docket***Civil Case Terminated pursuant to MDL 2989 Conditional Transfer Order filed 4/13/2021 (bg, ) (Entered: 04/13/2021)[+] Read More [-] Read Less
Docket(#8) CONDITIONAL TRANSFER ORDER from MDL Panel transferring case to Southern District of Florida. (bg, ) (Entered: 04/13/2021)[+] Read More [-] Read Less
Docket(#7) MINUTE entry before the Honorable Edmond E. Chang: Initial tracking status hearing set for 06/04/2021 at 8:30 a.m. to track the case only (no appearance is required, the case will not be called). Instead, the Court will set the case schedule after reviewing the written status report. The parties must file a joint initial status report with the content described in the attached status report requirements by 05/28/2021. Plaintiff must still file the report even if Defendant has not responded to requests to craft a joint report. If not all Defendants have been served, then Plaintiff must complete the part of the report on the progress of service. Also, counsel must carefully review Judge Chang's Case Management Procedures, available online at ilnd.uscourts.gov (navigate to Judges / District Judges / Judge Edmond E. Chang). Because the Procedures are occasionally revised, counsel must read them anew even if the counsel or the party has appeared before Judge Chang in other cases. Emailed notice (Attachments: #1 Status Report Requirements) (mw, ) (Entered: 04/06/2021)[+] Read More [-] Read Less
Docket(#6) WAIVER OF SERVICE returned executed by Mark Milhouse. Robinhood Securities, LLC waiver sent on 3/24/2021, answer due 5/24/2021. (Rapp, Eve -Lynn) (Entered: 03/24/2021)[+] Read More [-] Read Less
Docket(#5) WAIVER OF SERVICE returned executed by Mark Milhouse. Robinhood Markets, Inc. waiver sent on 3/24/2021, answer due 5/24/2021. (Rapp, Eve -Lynn) (Entered: 03/24/2021)[+] Read More [-] Read Less
Docket(#4) WAIVER OF SERVICE returned executed by Mark Milhouse. Robinhood Financial LLC waiver sent on 3/24/2021, answer due 5/24/2021. (Rapp, Eve -Lynn) (Entered: 03/24/2021)[+] Read More [-] Read Less
DocketCASE ASSIGNED to the Honorable Edmond E. Chang. Designated as Magistrate Judge the Honorable Sheila M. Finnegan. Case assignment: Random assignment. (cm, ) (Entered: 03/24/2021)[+] Read More [-] Read Less
Docket(#3) ATTORNEY Appearance for Plaintiff Mark Milhouse by Eve -Lynn J. Rapp (Rapp, Eve -Lynn) (Entered: 03/23/2021)[+] Read More [-] Read Less
Docket(#2) CIVIL Cover Sheet (Rapp, Eve -Lynn) (Entered: 03/23/2021)[+] Read More [-] Read Less
Docket(#1) COMPLAINT filed by Mark Milhouse; Jury Demand. Filing fee $ 402, receipt number 0752-18050493.(Rapp, Eve -Lynn) (Entered: 03/23/2021)[+] Read More [-] Read Less
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