LITTLE ROCK, Ark. – A Little Rock father son duo is one of thousands suing stock trading company Robinhood. The pair says the company stopped trades on certain key stocks at their peak, and now the family is out thousands of dollars. Kevin Kelley and his son, Zack, are both coaches at Little Rock private school Pulaski Academy. But the two share more than just a career. They both invested in companies like Nokia and Gamestop after shares skyrocketed in price earlier this year. But they were shorted out of thousands of dollars when the brokerage firms they used halted trading. Now, they’re taking a stand in federal court.
Losing is a rare occurrence for Coach Kevin Kelley; his football team at Pulaski Academy has a 13 and 0 record, one of the best in the state. But off the field, Kelley recently had a major loss in the stock market. “I’ve been trading stocks and options for about 20 years,” said Kelley, who recently issued a lawsuit with his son against companies like Robinhood and Ameritrade. Both had bought shares in stocks skyrocketing in price after an online effort boosted shares about to be “shorted” by hedge funds.
But before they could profit, it all came crashing down. “We did some stock and some options on 4 or 5 different stocks that later became halted,” Kelley explained. He says popular brokerage apps like Robinhood illegally halted trading to help protect hedge funds. Now, the father and son are suing in federal court. “This is right and wrong,” Kelley said. “It was wrong what they did.”
Zack explains it like a football game, with the running back yards away from a touchdown. “He returns the kickoff, he’s past the defense, he’s past everybody,” Zack Kelley said. “He’s on the 40-yard line and he’s about to score a touchdown, and the ref says, ‘no no no, we’ll pause right here.'” The Kelleys say while the game is in “time out” – or trading is halted – no one is able to sell or buy, and the cost of the stock plummets. “The next thing you know, when everything opened back up it was basically worthless,” said Zack.
For his dad and him, this meant losing out on almost $17,000, a blow they’re hoping someone answers for. “Whoever was the one to make the decision to do this, I hope they’re held accountable,” Kevin Kelley said, “and if this suit helps do that, then I’m more than happy to be a part of it.”
The Kelleys say they understand they may never get their money back. Part of their lawsuit alleges that Robinhood violated the Sherman Anti-Trist Act which has outlawed business monopolies since 1890.