Colorado Man Suing Apps Over Stock Lockout

DENVER (KDVR) - A Colorado man says he suffered "significant financial losses" after apps like Robinhood blocked investors from purchasing certain stocks Thursday.

In a lawsuit filed Thursday, Chance Daniels says he was forced to cut his losses and sell his GameStop stock, forcing him to "helplessly watch as the value of his equities held plummeted in value."

GameStop stock has rocketed from below $20 earlier this month to close around $350 Wednesday as a volunteer army of investors on social media challenged big institutions who had placed market bets that the stock would fall.

Thursday, Robinhood said investors would only be able to sell their positions and not open new ones in some cases. Robinhood also required investors to put up more of their own money for certain trades instead of using borrowed funds.

Some of those restrictions were lifted Friday, and GameStop stock closed at $325.00.

Robinhood published a blog post Thursday, defending the companies decision, saying in part:

"Amid this week's extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today."

Daniels is represented by the Denver-based Hannon Law firm. Calls and emails to Hannon representatives were not returned Friday.