Robinhood agreed to reimburse $9.9 million to settle the class action, which sought damages for U.S. consumers who owned stock or options on March 2, 2020.
The lawsuit also demands monetary compensation for some consumers who suffered financial losses as a result of outages on March 2, 3, and 9, 2020. Almost 150,000 Robinhood members claimed they were affected by frequent app outages during that period.
Customers say outages cost them $20.4M, and they’re seeking for 50%.
Update: On September 8, 2022, a federal judge in California refused to approve the settlement because he thought the administration costs of $400,000 were excessive and should be reduced so that affected users could receive more money. The judge was also unclear on the question of what the average user would receive.
The App was inaccessible during the market record day.
Since the beginning, Robinhood has been the target of complaints and criticism from unhappy customers. People have started speaking out against the company on social media, and more lawsuits are likely to be filed against it.
Along with Coinbase, Robinhood sees itself as a leader in the decentralisation of finance. However, it has been hit with a number of lawsuits that say bugs and outages in its trading app have cost users money.
According to the lawsuits, the trading app was inaccessible for just three minutes during the day’s highest trading volume, costing users the potential profit they could have made. Ironically, nobody could trade during that time when Robinhood shares were trading at a high of 11.9%.
Users of Robinhood are represented by Mark C. Molumphy, Anne Marie Murphy, Noorjahan Rahman, Tyson C. Redenbarger, Julia Peng, Matthew B. George, Kathleen A. Herkenhoff, and Laurence D.
If you are impacted in any way by Robhinhood’s unethical business practises, please comment and let us know.