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Colorado man files federal lawsuit against Robinhood and other stock trading platforms

GameStop-Stock Surge
Posted at 4:58 PM, Jan 29, 2021
and last updated 2021-01-29 21:04:03-05

DENVER — A Colorado man filed a federal lawsuit against Robinhood and other stock trading platforms after suffering what his attorney referred to as "significant financial losses" in the complaint.

Robinhood Financial, TD Ameritrade, Citadel Securities, Charles Schwab, Interactive Brokers, Open to the Public Investing and Webull are all named in the lawsuit.

According to documents filed on January 28, a Colorado man named Chance Daniels is accusing the companies of manipulating the open-market when those trading platforms restricted trading for several stocks.

It said Daniels attempted to make trades with Robinhood, Charles Schwab and TD Ameritrade but was unable to do so. The lawsuit went on to say he sold GameStop (GME) to cut his losses.

Thus, Plaintiff, like so many others, was forced into a situation by which he was essentially forced to sale his equities at a drastically reduced position given the new market condition set by these supposedly neutral brokerage houses, taking significant losses and being incapable of trading in these publicly held equities that he had performed significant due diligence and research on, and relied upon over the course of his job as a day trader.

Denver7 News reached out to Daniels and his attorney for comment but they have yet to respond. In the lawsuit, the plaintiff asks the court to certify it as a class action case.

Grant Margheim, a Robinhood user who lost about $1,900 during the course of the restrictions said he would consider joining the lawsuit.

"I’m just a normal average person like everyone else who was effected by this," said Margheim. "I think if there’s good evidence there and proof of a wrong I would definitely sign my name to the lawsuit."

Margheim said he found out about Robinhood on Twitter and began using it about six months ago.

"When the pandemic started, of course I was like others looking for other ways to supplement income that had been suffering," said Margheim.

State Rep. Dave Willaims (R-Colorado Springs) is calling on the Colorado attorney general to open an investigation. When asked about his reaction to the lawsuit, he said, "God bless them." He also believes there was market manipulation and said the trading platforms changed the rules of the game.

"That’s why we need an investigation, that’s why we need our attorney general to look into it. The fact is they stopped people from being able to engage freely in the marketplace, in buying or selling," said Williams.