Who is engaging into market manipulation, the brokers or the retail investors?

Brendon Nelsonto, a Robinhood trader based in Massachusetts, filed a federal lawsuit on behalf of himself and other clients against the zero-commission platform for engaging into market manipulation following restrictions imposed by the no-fee app on transactions involving GameStop, AMC, and other stocks.

Nelsonto said: "Robinhood's actions were done purposefully and knowingly to manipulate the market for the benefit of people and financial instuitions who were not Robinhood's customers. Since pulling the stock from their app, GME prices have gone up, depriving investors of potential gains." 

Robinhood is not alone, though. Most online brokers such as TD Ameritrade, IG Group and Charles Schwab have put a halt on handling any new orders for GameStop stock, meaning investors couldn't close out their positions to make their profit. Some users reported losing potential gains due to not being able to complete trades, which could drag further lawsuits against their brokers.

Furthermore, Trade Republic, a German retail brokerage, has also banned its users from buying GameStop, AMC, Blackberry, Nokia and other stocks amid a surge of bets by small investors. 

The fintech startup said users are only allowed to close out their positions. It cited the "hefty, coordinated share speculation," joining other brokers who accused the amateur investors of market manipulation.

The speedy rise in price gained mainstream media coverage, which prompted US lawmakers to demand Robinhood to provide more information and justify its decision to restrict retail trading in shares of GameStop and other stocks.

Democrat Alexandria Ocasio tweeted Thursday that she disagreed with Robinhood's decision to abruptly stop transactions around the stocks that experienced Reddit-inspired dramatic rises this week.

Robinhood has just stated that it moved to curb the wild trading activity through restricting transactions for certain securities to position closing only, including GameStop, AMC Entertainment, BlackBerry and Koss. "We also raised margin requirements for certain securities," it added.

Meanwhile, Interactive Brokers has also switched option trading on such heavily-shorted securities into liquidation only due to "the extraordinary volatility in the markets." 

​Who is engaging into market manipulation, the brokers or the retail investors? Who do you think?