Attorney Rachel Furst Appointed Liaison Counsel of January 2021 Short Squeeze Trading Litigation
Rachel Furst

Attorney Rachel Furst Appointed Liaison Counsel of January 2021 Short Squeeze Trading Litigation

Grossman Roth Yaffa Cohen is proud to announce that Judge Cecilia Altonaga of the United States District Court for the Southern District of Florida has appointed Attorney Rachel Furst to serve as liaison counsel for plaintiffs in the January 2021 Short Squeeze Trading Litigation, a multidistrict litigation (MDL). Robinhood, TD, Ameritrade, Melvin Capital, E*TRADE, Citadel, and Sequoia Capital are among the 35 companies named as defendants.

The MDL consolidates over 50 class action suits that have been filed against 35 defendants and asserts claims that fall into four groups, or “tranches”:

  • Antitrust claims
  • State-law claims against Robinhood
  • State-law claims against other broker-dealers
  • Federal securities law claims

The plaintiffs are retails investors who identified that certain securities—GameStop (GME) and 11 other stocks—were undervalued and that the “short” positions of various hedge funds and investment firms were over-leveraged. A “short seller” borrows shares of a stock to sell them and buy them back later at a lower price. The idea is that the short seller can then return the stock to the lender and profit off the difference.

The retail investors’ purchase of the stocks “shorted” by the hedge funds in the final weeks of January created a “short squeeze,” as the companies were pressured to close their short positions.

According to the plaintiffs, the brokerages wrongfully halted trading.

In April, the Judicial Panel on Multidistrict Litigation consolidated 39 suits before Judge Altonaga into the January 2021 Short Squeeze Trading Litigation, case number 21-2989-MDL-ALTONAGA/Torres, saying they involved similar breach-of-contract claims stemming from trade restrictions that online platforms imposed on GameStop and other stocks.

After conducting interviews, Judge Altonaga selected Attorney Furst as the sole liaison counsel, who is responsible for all administrative matters, including facilitating communications between the court and MDL counsel. To learn more about the structure of this MDL, read the leadership announcement here.

“This case has generated enormous attention because so many investors were harmed by Robinhood and the other defendants’ unfair and unlawful practices,” Attorney Furst stated. “I am pleased that these important cases are here in Miami, and I am honored to have been appointed to help to coordinate the talented group of attorneys. Judge Altonaga appointed lawyers from around the country who I know will work hard and quickly to develop and bring these cases to trial.”

Attorney Furst focuses her practice at Grossman Roth Yaffa Cohen on class actions and individual claims involving deceptive consumer practices, professional malpractice, and breach of fiduciary duty, as well as personal injury. She regularly serves as counsel to clients in MDLs and takes on leading roles in cases; her exemplary legal skills have proven effective in state and federal courts. She is acclaimed by Super Lawyers®, Rising Stars, and 40 Under 40 Outstanding Lawyers of South Florida.

To speak with a qualified legal staffer at Grossman Roth Yaffa Cohen, contact our Miami firm online or reach us by phone at (866) 629-1061.


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