Apex Clearing Corporation Jan. 2021 Short Squeeze (Other Broker)

  • Active

Investigation
01/27/2021

Initial Lawsuit
01/28/2021

Lawsuit Progression
05/18/2021

Investigation

  • Proposed Claim
    Breach of Fiduciary Duty

Did brokers breach their fiduciary duties of care, loyalty, and good faith to their customers in connection with the Reddit meme stocks?

At end of January 2021, Robinhood and other brokers halted trading and/or restricted purchases and/or holdings of multiple stocks for more than a single trading session – January 28th – extending some of its restrictions for six trading sessions, through February 4th.

Some of the suspended stocks included GameStop Corp. (GME), AMC Entertainment Holdings Inc. (AMC), American Airlines Group Inc. (AAL), Bed Bath & Beyond Inc. (BBBY), BlackBerry Ltd. (BB), Castor Maritime, Inc. (CTRM), Express, Inc. (EXPR), Koss Corporation (KOSS), Naked Brand Group Ltd. (NAKD), Nokia Corp. (NOK), Sundial Growers Inc. (SNDL), Tootsie Roll Industries, Inc. (TR), or Trivago N.V. (TRVG)

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed. We will update this post as it unfolds.

Main Event

To our readers. . .

Because the events at cause are essentially the same as in the securities case, we have disabled this timeline. But don’t worry, you can access the factual timeline of relevant events by visiting the Robinhood Markets, Inc. (Jan. 2021 Short Squeeze – Securities) case page:

See more on Factual Timeline

Initial Lawsuit

First Complaint - 01/28/2021

This is the first-identified class-action complaint alleging negligence and breach of fiduciary duties. The case was filed on behalf of all persons or entities in the United States that:

“All citizens of the United States who own or owned accounts on Robinhood’s trading platforms and as of January 27, 2021 at 5 pm EST own or owned securities of “GME”, “BB”, “NOK”, “AMC”, “BBBY”, “EXPR”, and “KOSS” which Defendants did not allow the purchase of those securities on January 28, 2021 and for Defendant TD Ameritrade, on January 27, 2021.“

Please note that numerous class action complaints against Robinhood (and other entities) were filed in early 2021. The cases were later consolidated and grouped by types of violations (see “Lawsuit Progression”). For convenience purposes, this tab only details the first identified complaint alleging negligence & breach of fiduciary duties.

For a complete list of class action complaints initially filed with the courts in connection with the January 2021 Short Squeeze, click here.

To access the class action cases grouped by types of violations, please refer to our additional pages:

  • Filing Date
    01/28/2021
  • Affected Period
    01/27/2021 to 01/28/2021
  • Transgression
    Negligence, Breach of Fiduciary Duty, Breach of Due Care And The Implied Covenant of Good Faith And Fair Dealing
  • Filing Firms
    The Hannon Law Firm, LLC
  • Case Title
    Daniels v. Robinhood Financial LLC
  • Docket Number
    1:21-cv-21261
  • Court
    Colorado District Court
  • Free File
    Complaint

Allegations

Defendants had a duty to exercise reasonable care in conducting and facilitating
transactions for their customers.

Defendants had a duty to exercise reasonable care in providing trades on the free,
open market for their customers.

Defendants unlawfully breached their duties by, among other things, (i) removing Subject Securities without notice from purchase through their trading applications; (ii) allowing only sales of the Subject Securities without allowing purchases, (iii) failing to provide financial services related to Subject Securities; (iii) failing to notify customers in a timely manner of the Subject Securities “blackout.”

Defendants

  • Company
    Robinhood Financial LLC
  • Company
    TD Ameritrade, Inc.
  • Company
    Open to the Public Investing, Inc.
  • Company
    Charles Schwab & Co, Inc.
  • Company
    Interactive Brokers, LLC
  • Company
    Citadel Securities, LLC
  • Company
    Webull Financial, LLC

Lawsuit progression

  • Docket Number
    1:21-md-02989
  • Court
    Florida Southern District Court

Lead Counsel

05/18/2021

The court issued an order appointing the lead plaintiff and lead counsel.

  • Lead Counsel
    Safirstein Metcalf LLP
  • Lead Plaintiff
    Group of Individuals
  • Free File
    Order for lead

Third Amended Complaint

06/15/2022

1. All persons or entities in the United States that: held shares, or call options for shares, of any of GME, AMC or KOSS as of the end of the day on January 27, 2021, and sold or were forced to let such call options expire worthless, between January 28, 2021, and February 23, 2021. 2. All Apex broker-dealer direct customers and shared customers who held shares or call options for shares of AMC, GME, and/or KOSS as of the end of the day on January 27, 2021, who sold or were forced to let such call options expire worthless, during the class period, and suffered damages. 3. All Apex broker-dealer direct customers and shared customers who placed a sale order on shares, or on call options for shares, of AMC, GME, and/or KOSS, whose orders were delayed during the class period, and suffered damages. 4. All Apex broker-dealer direct customers and shared customers who placed a buy order for shares, or for call options for shares, of AMC, GME, and/or KOSS, whose order was initially accepted by Apex or the Apex introducing broker-dealers, whose order was ultimately rejected by Apex or the Apex introducing broker-dealers during the class period, and suffered damages.

Motion to Dismiss

06/22/2022

A motion to dismiss was filed with the court.

[stockdio-historical-chart symbol=”HOOD” stockExchange=”NYSENasdaq” width=”500″ height=”330″ motif=”blinds” palette=”humanity” includeVolume=false]

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