The plaintiffs in a short squeeze lawsuit targeting companies such as Robinhood and Citadel need more time to draft an amended antitrust complaint. This becomes clear from documents filed in the Florida Southern District Court on November 29, 2021.
Let’s recall that earlier in November the Court nixed the conspiracy claims against E*Trade Securities LLC; E*Trade Financial Holdings, LLC; Interactive Brokers LLC; Robinhood Markets, Inc.; Robinhood Financial LLC; Robinhood Securities, LLC; Citadel Securities LLC; Apex Clearing Corp.; Electronic Transaction Clearing, Inc.; and PEAK6 Investments LLC.
However, the Court allowed the plaintiffs – traders affected by the January trading short squeeze, to amend their complaint and submit it not later than December 20, 2021.
Now, the plaintiffs request that their time be extended to January 20, 2022. The Antitrust Plaintiffs state that because of a planned trial that co-lead counsel for the Antitrust Plaintiffs, the Joseph Saveri Law Firm (JSLF), are engaged in a trial that started on November 29, 2021. JSLF expects the trial to last approximately four weeks.
Counsel for Defendants Robinhood, Citadel Securities, Apex Financial, and E*Trade responded that their clients take no position with respect to the requested relief. Counsel for the remaining defendants did not respond or raise any opposition to the Motion.
This putative class action is brought on behalf of individual investors who suffered losses as a result of the defendants’ response to a “short squeeze” — a situation in which stocks or other assets rise sharply in value, distressing short positions. This short squeeze occurred in late January 2021, as the retail investors rapidly purchased certain stocks they believed would increase in price: GameStop (GME), AMC Entertainment (AMC), Bed Bath & Beyond (BBBY), BlackBerry (BB), Express (EXPR), Koss (KOSS), Nokia (NOK), Tootsie Roll Industries (TR), and Trivago NV (TRVG), exposing those with short positions to “massive potential losses.
According to the plaintiffs, the defendants conspired to prevent these losses by “artificially constricting the price appreciation of the relevant securities,” in violation of the Sherman Act, 15 U.S.C. § 1.
On November 17, 2021, the Court sided with the defendants. The Judge explained that the plaintiffs failed to plead a conspiracy.
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