The Robinhood Class Action Lawsuit: Background and Amendments
The popular trading, Robinhood, was recently sued after traders were unable to buy, sell, or trade on the app because of inopportune outages and roaring stock market activity. This, combined with other, similar, allegations, gave way to the Robinhood Class Action Lawsuit.
The class action suit alleges that users of the app were locked out of their accounts rendering it useless and inaccessible for the users to get to their funds or make any trade at a time when the market gained a record $1.1 trillion, and at another time when the Dow Jones Industrial Average had its largest point plunge in history and users were also unable to access their funds or make trades which resulted in them suffering considerable losses. The app has gone dark 47 times since March. Robinhood Financial, Robinhood Securities, and Robinhood Markets were accused of negligence, breach of contract and fiduciary duties, and violations of Financial Industry Regulatory Authority (FINRA) regulations.
You can find the case under the name: In re Robinhood Outage Litigation, 3:20-cv-01626-JD, N.D. CA.
Are you a trader that uses the Robinhood app? You may be qualified to join the class action lawsuit.
“Colossal Debt is no Game”
The amendment to the case accused the trading app creators of making the app interface appear “game-like” which drew in a number of inexperienced investors, particularly millennials with the average user’s age found to be at 31. This added to the allure of the app that offered no trading fees or account minimums to maintain, as well as the ease of use of Robinhood’s stock-, options- and margin-trading products with the platform giving behavioral nudges and push notifications. The class action lawsuit argued that “unfortunately for many Americans, losing investment and retirement funds or accruing colossal debt is not a game, and the consequences have been tragic.”
The Robinhood app includes features “that make investing appear more like a game,” such as giving new users a free share of a stock that’s revealed similarly to a scratch-off lottery ticket with falling confetti on the user’s screen once the stock is revealed. New users who want to get into options trading only have to respond to multiple-choice questions and are then basically coached by the app on how to go from “no investing experience” to “not much” investing experience. The lawsuit affirms that “Robinhood’s conduct as set forth in this Complaint was wont of even scant care and its acts and omissions were and continue to be an extreme departure from the ordinary standard of conduct. Indeed, Robinhood essentially abandoned its customers altogether during the Outages, a standard of care so far below what is required for a business engaging in time-sensitive financial services that it amounts to a complete abandonment of its duties.”
Editor’s note on the Robinhood Class Action Lawsuit:
This article is crafted to inform you about the Robinhood App Class Action Lawsuit. If you have downloaded and used the app and encountered the same problems as claimed in the class action, we encourage you to contact us today!
If you are considered eligible to be among the class of consumers described in the article above, you may eventually be able to participate in receiving any compensation the court may award.
We’d be happy to help you take a step in the right direction, fight this issue, and better enable you to join in on any potential consumer class action. If interested, please send an email to Outreach@ConsiderTheConsumer.com, find us on Twitter or Facebook, or even connect with us directly on our website! We look forward to hearing from you all.
Similarly, please check out our current list of Class Actions and Class Action Investigations, here.
Interested in articles like these? Become a subscriber below!