A 27-year-old truck driver is getting a $30,000 payday from Robinhood after the trading app was found liable for losses he incurred when the online broker restricted trading on meme stocks in January 2021 during an unprecedented short squeeze.
On Thursday, Jan. 6, the Financial Industry Regulatory Authority (FINRA) ruled that Robinhood had to pay Jose Batista $29,460.77 in damages, the first judgment of its kind, according to MarketWatch.
Batista filed a complaint against Robinhood in May 2021 after he said the stock restriction severely impacted his bottom line.
“I remember that day, it was life-changing for me. I was just day-trading, just trying to catch momentum,” Batista told MarketWatch. “My plan was to sell Koss and Express that day. I had a lot, but no one could buy it.”
The day before Robinhood restricted trading, Koss closed at $58 per share and Express closed at $9.55 per share. After the trading freeze, Koss closed at $35 and Express at $5.
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“It was tough to watch,” Batista said. “They (Robinhood) basically left me with no other option. They were saying ‘You’re just stuck. If you want to sell it, sell it.’”
FINRA arbitrator John James McGovern Jr. found that Robinhood Markets and Robinhood Financial were “jointly and severally liable” for Batista’s losses.
Batista’s lawyer, Jorge Altamirano of Iorio Altamirano LLP, said he and Batista took a different legal approach than other retail investors who’ve filed lawsuits against Robinhood.
“There was a lot of noise about all of the conspiracy theories,” Altamirano said. “Finra showed here that they were willing to adjudicate a case on the merits. This opens the door for other investors to revisit that day [in January] and maybe take action.”
Batista is satisfied with the outcome and said he will continue to trade, but plans to stay away from meme stocks.
“I’m definitely going to continue to trade,” Batista said. “These aren’t meme stocks to me. I just watch the momentum. I’ll take 10 stocks and watch throughout the day.”
Photo: Jose Batista with his mother, Courtesy of Jose Batista