Facebook shuts Robinhood Stock Traders group amid Wall Street chaos

Facebook closed down a Wall Street discussion group on its platform, Robinhood Stock Traders, amid the frenzy around GameStop shares on Wall Street.

Facebook said that the group, which has 157,000 members, was taken down for allegedly violating policies unrelated to stock price surges.

The group held conversations regarding buoying shares of GameStop and other companies this week.

GameStop, AMC Entertainment Holdings Inc and BlackBerry have all been the subject of a dispute between coordinated individual investors on Wall Street and hedge funds that had bet on the struggling companies tanking.

Allen Tran, a 23-year-old from Chicago who created Robinhood Stock Traders, said he received a notification on 7 January from Facebook regarding the shutdown of the page that claimed the group shared content including “adult sexual exploitation”.

“We were first on the picking tree to be cut off because we are on Facebook, not a free platform like Reddit,” Tran told Reuters.

Facebook spokeswoman Kristen Morea said, “This group was removed for violating our Community Standards, unrelated to the ongoing stock frenzy.” She did not respond to requests to elaborate.

Facebook labelled the group a “dangerous organization,” according to correspondence seen by Reuters.

The ban comes close on the heels of a federal class-action lawsuit against the group.

The lawsuit, filed in the Southern District of New York on Thursday, alleges that the app “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise, thereby deprived [sic] retail investors of the ability to invest in the open-market and manipulating the open-market.”

The group made a statement on a blog post on Thursday saying: "We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only."

Alexander G. Cabeceiras, the attorney who filed the suit, tweeted shortly after: "Robinhood’s mission is to democratize finance for all.’ This is simply not true."

The lawsuit seeks $GME trading to the platform, as well as a class action fee for plaintiffs, attorneys' fees, and punitive damages.