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Earlier this month, GameStop investors got a flashback to 2021. Traders trying to buy or sell GameStop (GME) saw a familiar message: “GME is restricted from overnight trading due to a corporate action within a three-day window.” On social media, speculation spread quickly. Some investors claimed “no options available to trade due to waiting on distribution of warrants.”
Altamirano PLLC reviewed the situation and traced it to a series of Options Clearing Corporation (OCC) memos #57253, #57372, and #57391 detailing a warrants distribution for GameStop shareholders. Under the corporate action, each investor received one warrant for every ten shares held, allowing the purchase of additional GameStop stock at $32 per share. The distribution required option-contract adjustments, changing the option symbol from GME to GME1 and delaying settlement until the warrants began trading on the New York Stock Exchange as GME WS.
By October 8, 2025, the OCC confirmed that settlement had cleared and normal trading had resumed. This was a mechanical process, not a broker-imposed restriction. But for investors who lived through the meme stock frenzy of January 2021, the alert felt all too familiar, a reminder of how quickly access to the market can disappear.
The 2021 Meme Stock Event: A Breakdown in Risk and Trust
The 2021 GameStop trading restrictions marked a turning point in retail investor confidence. On January 28, 2021, Robinhood and several other brokerages abruptly restricted trading in GameStop, AMC, and other heavily shorted stocks, citing clearinghouse deposit requirements and extreme volatility. Retail investors found themselves unable to buy and faced strict position-closing-only (PCO) trading restrictions.
A subsequent investigation by the House Financial Services Committee confirmed what many investors suspected: Trading platforms were overwhelmed as market activity increased. More specifically, Robinhood’s systems and capital planning were unprepared for volatility. The Committee’s final report offered blunt findings.
Robinhood’s risk controls and culture prioritized growth over stability. The firm had experienced multiple technology outages before the meme stock event, including a complete shutdown on March 2–3, 2020, during historic market volatility at the start of the COVID-19 pandemic.
FINRA later imposed the largest fine in its history for those outages and related supervisory failures, finding that Robinhood failed to supervise technology critical to providing core broker-dealer services.
Robinhood ignored warnings about inadequate stress testing. As early as April 2020, FINRA examiners advised Robinhood to adopt a more conservative approach to modeling collateral requirements for clearinghouses such as the NSCC and the OCC. Robinhood’s internal “day zero” assumption drastically understated its potential capital obligations. The firm did not begin modeling for the Excess Capital Premium charge until after it was hit with an unexpected $3.7 billion collateral call on January 28, 2021.
The clearing system itself revealed uneven treatment. According to the report, the Depository Trust & Clearing Corporation (DTCC) waived $9.7 billion in collateral deposit requirements on January 28, 2021. While many brokers restricted trading to reduce their exposure, the waivers showed that clearinghouses had flexibility for institutions even as retail investors were locked out of the market.
The Committee’s conclusion was clear: the broker-dealers facing the greatest liquidity stress imposed the harshest trading restrictions. For Robinhood, inadequate capital and liquidity planning, not market volatility, drove the decision to restrict trading in GameStop and other stocks.
From 2021 to 2025: Why Familiar Messages Still Matter
Fast forward to October 2025. The OCC memos on GameStop’s warrant distribution #57253 on September 12, #57372 on October 2, and #57391 on October 8 describe a standard corporate-action adjustment. Yet for investors, the experience of seeing “GME restricted” on their screens brought back the same uncertainty that defined the 2021 event.
The episode underscores a broader truth that retail investors still carry the memory of being locked out of their trades with little explanation. Technical issues and risk-management decisions are inevitable in financial markets, but transparency and accountability remain uneven. Many still feel the sting of the January 28, 2021, meme stock events.
The difference this time was clear notice and communication. In 2025, the OCC published clear memos explaining the warrant mechanics, and trading resumed promptly. In 2021, investors got misleading statements, confusion, and losses.
Legal Accountability: Regulation Best Interest and Securities Violations
The same principles that protect investors during ordinary trading also apply when markets are under stress. Regulation Best Interest (Reg BI) requires broker-dealers and their representatives to act in the best interest of retail investors every time they make a recommendation involving a security or investment strategy.
While Reg BI applies to recommendations rather than system performance or technology, firms that fail to supervise or communicate truthfully about outages, trading restrictions, or capital constraints may still violate the rule’s Care or Compliance Obligations. A broker-dealer cannot prioritize its own liquidity or capital preservation over a customer’s ability to trade without breaching those duties.
These failures can also amount to securities law violations, including misrepresentation, omission of material facts, or failure to supervise. Investors who lost the ability to buy or sell shares during a restriction, or who were misled by their trading platform, may have actionable claims under both federal and state securities fraud standards.
For more information, see our Securities Violations page.
Investor Claims and Altamirano PLLC’s Experience
Many investors from the 2021 meme stock events never pursued claims. However, FINRA arbitration remains open to individual investors with losses from trading restrictions, platform outages, or misinformation.
Our Principal, Jorge Altamirano, represented an investor in the first and only FINRA arbitration award over Robinhood’s meme stock trading restrictions, obtaining an early victory for self-directed traders when brokerage firms’ systems or decisions harm retail clients. Learn more about our work representing Robinhood and self-directed investors nationwide, and how Altamirano PLLC continues to vet claims and represent investors in cases involving trading restrictions, brokerage failures, and Reg BI violations that undermine fair access to the markets.
Investors impacted by the GameStop trading restrictions or similar meme stock halts may still be able to pursue recovery through FINRA arbitration.
A Market That Still Bears the Scars of 2021
The October 2025 GameStop warrant adjustment was routine, but the reaction it sparked online revealed something deeper: trust in retail brokerage platforms has not fully recovered. Each new trading glitch or restriction, even when benign, revives the question of whether the system serves investors or itself.
Robinhood has since faced multiple regulatory fines and settlements. Brokers have upgraded their risk models. Yet the structural imbalance and distrust remain. Clearinghouses, market makers, and broker-dealers still operate with capital and information advantages that retail investors do not.
For investors, the takeaway is simple: you have rights when brokers fail to meet their obligations. Federal securities laws impose enforceable standards on how firms handle risk management, capital, and liquidity planning. These laws also prohibit material misstatements or omissions in connection with securities transactions.
Contact Altamirano PLLC About Robinhood Arbitration Claims
Altamirano PLLC continues to monitor developments involving GameStop, Robinhood, and retail trading platforms that affect investor access and transparency. If you were unable to trade during the 2021 meme stock restrictions, or if you believe your brokerage firm failed to act in your best interest, contact Altamirano PLLC at (212) 220-6556 for a confidential review of your potential FINRA arbitration claim.
