[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

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No. 22-10669 ____________________

In re: JANUARY 2021 SHORT SQUEEZE TRADING LITIGATION, ___________________________________________________ ANDREA JUNCADELLA, EDWARD GOODAN, WILLIAM MAKEHAM, MARK SANDERS, JAIME RODRIGUEZ, et al., Plaintiffs-Appellants, versus ROBINHOOD FINANCIAL LLC, ROBINHOOD SECURITIES, LLC, ROBINHOOD MARKETS, INC., USCA11 Case: 22-10669 Document: 58-1 Date Filed: 08/10/2023 Page: 2 of 32

2 Opinion of the Court 22-10669

Defendants-Appellees.

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Appeal from the United States District Court for the Southern District of Florida D.C. Docket Nos. 1:21-md-02989-CMA, 1:21-cv-20414-CMA ____________________

Before JILL PRYOR and GRANT, Circuit Judges, and MAZE,* District Judge.

GRANT, Circuit Judge: Like so many other industries, retail investing has been transformed by the internet. Once upon a time, a person who wanted to trade stocks needed a flesh-and-blood stockbroker. Now, most anyone with a smartphone and a bank account can trade stocks from the comfort of their own home. Sometimes that goes well; other times not. In January 2021, many customers of the online financial services company Robinhood were aggressively buying specific stocks known as “meme stocks” in a frenzy that generated widespread attention. This phenomenon brought Robinhood additional revenue and a

* The Honorable Corey L. Maze, United States District Judge for the Northern District of Alabama, sitting by designation. USCA11 Case: 22-10669 Document: 58-1 Date Filed: 08/10/2023 Page: 3 of 32

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huge number of new customers, but it also exposed the company to unprecedented regulatory compliance risk. Robinhood then made a high-profile and controversial decision: it suddenly restricted its customers’ ability to buy these meme stocks (but not their ability to sell them). Some Robinhood customers who could not buy the restricted stocks brought this putative class action, seeking to represent both Robinhood customers and all other holders of the restricted meme stocks nationwide who sold the stocks during a certain period. As Robinhood customers, they allege that they lost money because Robinhood stopped them from acquiring an asset that would have continued to increase in value. And as stockholders, they allege that Robinhood’s restriction on purchasing the meme stocks caused the price of their stocks to fall. The plaintiffs fail to state a claim—their contract with Robinhood gives the company the specific right to restrict its customers’ ability to trade securities and to refuse to accept any of their transactions. Because Robinhood had the right to do exactly what it did, the plaintiffs’ claims in agency and contract cannot stand. And under basic principles of tort law, Robinhood had no tort duty to avoid causing purely economic loss. We thus affirm the district court’s dismissal of the claims. I.