By Mengqi Sun

Robinhood Markets Inc. is facing more than 30 civil lawsuits in relation to trading restrictions imposed by the online brokerage that temporarily limited purchases of certain securities last week, according to court records.

Several groups of individual investors and users of the mobile trading app have filed separate lawsuits in federal courts in New Jersey, Florida, California, Texas and other states alleging that Robinhood and its subsidiaries, by imposing restrictions on its platform, violated various laws, including breach of contract and fiduciary duty.

A spokeswoman for Menlo Park, Calif.-based Robinhood declined to comment on the lawsuits. Robinhood has said the restrictions were needed to meet clearinghouse requirements and regulatory obligations.

Amid market volatility, Robinhood and other popular online brokerages last week imposed restrictions on trading in highflying stocks, including videogame retailer GameStop Corp. and movie-theatre company AMC Entertainment Holdings Inc. Shares in those companies had skyrocketed as individual investors used social media to encourage each other to buy stocks and options. Shares of GameStop, for instance, which had been trading below $20 early last month, closed at $347.51 on Jan. 27.

The restrictions on the trading platforms left users with the choice of holding their stocks or selling them. Shares of GameStop and AMC fell Thursday after the restrictions and bounced back Friday after Robinhood allowed limited purchases. GameStop shares closed at $90 on Tuesday. The brokerage further loosened restrictions Wednesday.

One of the lawsuits, filed Thursday in the Southern District of New York by an individual investor, alleges that Robinhood "deprived their customers of the ability to use their service" as well as potential gains from trading for "no legitimate reason."

Another lawsuit filed by a Robinhood user Thursday in the Northern District of California alleges that Robinhood's removal of the GameStop stock from its trading platform amid a stock rise deprived individual investors of the ability to invest in the open market and to manipulate the market for the benefit of individuals and financial institutions that weren't Robinhood's customers.

Another complaint against Robinhood filed by customers Tuesday in the Northern District of California, alleges that the brokerage's explanation of its restrictions was false and misleading, and that the company imposed the limits to drive down the prices of the hot stocks and to benefit its institutional partners.

"We look forward to seeking justice for consumers and holding Robinhood to account for its conduct last week," Jason Rathod, a lawyer at Migliaccio & Rathod LLP representing the plaintiffs in the case, said in an email. "So far, Robinhood has deflected responsibility, and acted as if external forces beyond its control are responsible for suspending trading. These excuses ring hollow," Mr. Rathod said.

Attorneys representing the plaintiffs in the other cases didn't immediately respond to requests for comment.

Robinhood, in recent blog posts, has said the restrictions stemmed from regulatory requirements and risk management considerations as a brokerage firm. That includes net capital obligations required by the Securities and Exchange Commission and deposits requirements from its clearinghouses, which process the securities on the back end after a user executes a trade with their brokerage.

Robinhood said in a post Friday that "the amount required by clearinghouses to cover the settlement period of some securities rose tremendously" last week. Its clearinghouse-mandated deposit requirements related to equities increased 10-fold, according to the post.

"To be the trusted and responsible platform you can rely on, Robinhood has to operate within the existing regulatory environment," the company said in a blog post Monday. "We have to make progressive strides while simultaneously complying with laws and regulations outside of our control."

Members of Congress have asked the SEC and other agencies to step up regulations and have made calls for hearings into the matter. Many individual investors have interpreted the trading restrictions as the latest sign that financial markets are stacked against individuals.

The SEC said Friday it planned to review the actions of some brokerage firms that restricted investors' ability to trade volatile stocks such as GameStop. And Treasury Secretary Janet Yellen has called a meeting with top financial regulators to discuss volatility in financial markets related to GameStop, the Treasury Department said Tuesday.

Write to Mengqi Sun at mengqi.sun@wsj.com

(END) Dow Jones Newswires

02-03-21 1547ET