Popular stock-trading app Robinhood could apparently face thousands of upcoming lawsuits from angry users alleging that it has restricted them from buying multiple shares from the struggling game-trading company GameStop.
Many of these users are part of the r/WallStreetBets movement that started on the discussion board site Reddit earlier this week, which saw small-time investors putting their money into low stocks belonging to struggling companies, such as BlackBerry and AMC.
This subsequently drove up the prices of these stocks in a form of protest against hedge-funds.
The movement has since gained massive traction online and is even being compared to the Occupy Wall Street protests from September 2011.
In addition to the lawsuits, more users have been advised to join DoNotPay.com in order to further protest Robinhood's strict decision, which they view is oppressive towards small-investors and shows favouritism over hedge-funds.
Speaking to news outlet CNBC, DoNotPay's CEO, Joshua Browder, explained that the idea to join the Robinhood class-action lawsuit on Thursday came after the company received hundreds of messages from enraged users.
'Robinhood is not acting in the consumer’s best interest: a lot of users who sign up aren’t the most sophisticated investors.'
'They feel betrayed by a platform that has the literal name Robinhood,' he added.
He also claimed that since yesterday, 26,000 people had joined the class action, while 4,000 had filed complaints with the Securities and Exchange Commission (SEC) and 400 had entered arbitration via DoNotPay.
There is a potential obstacle standing in the way of the success of these various lawsuits, however: according to the site MarketWatch, this could be due to Robinhood’s arbitration clause.
Robinhood's clause says: 'This Agreement contains a pre-dispute arbitration clause.'
'By signing an arbitration agreement, the parties agree as follows: All parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.'
The news about the planned Robinhood lawsuits comes after the SEC recently announced that it would begin monitoring the Wall Street stock market following the massive surge in GameStop's economic value.
Additionally, confusion also arose that led to a huge increase in followers for The World-Wide Robin Hood Society's official Twitter account.
Whatever the outcome, one thing is certain: investors are watching economic history unfold right before their very eyes.