Robinhood settles class action over service outages

Robinhood logo displayed on a smartphone screen.
(Photo Credit: Andrew Neel/Pexels.com)

Robinhood outage settlement class action overview:

  • Who: Robinhood has reached a settlement agreement with customers who sued the investing platform over repeat outages
  • Why: The plaintiffs said all investors were taken out of the market for a whole day in 2020 due to a service outage
  • Where: California federal court

Mobile securities app Robinhood Markets Inc. has reached a preliminary settlement with customers, stemming from a class action lawsuit filed after an outage that occurred on March 2.

Robinhood and the plaintiffs filed a joint notice of settlement in principle in a California federal court May 26. The notice didn’t include the specifics of the deal. 

The settlement comes after Robinhood customers filed a class action lawsuit against the company in March 2020, just days after a series of outages in 2020, including one on March 2, 2020, that took investors out of the market for most of the day.

Robinhood offers “commission-free” trades in securities using an internet/cloud-based platform for customers. 

In one class action launched against Robinhood soon after the outage, plaintiff Travis Taaffe alleged that on that day, Robinhood’s trading platform was fully inaccessible and not available to any of its customers.

The lawsuit argued that users were not able to access their accounts on the Robinhood platform and were also powerless in buying, selling, or trading securities.

Outage happened during record market day

Plaintiffs alleged that Robinhood customers were unable to access the trading platform for all but three minutes of the New York Stock Exchange trading hours on March 2, as well as there being additional outages the following day.

On top of this, the Robinhood class action lawsuit states that on March 2, the Dow Jones Industrial Average rose 1,294 points and the Nasdaq gained 384 points, which was the biggest ever point gain in one single day. 

Both the Dow and Nasdaq are used as indicators for stock performance. Because of the outage, Taaffe and other users were allegedly unable to participate in this day of growth.

The Robinhood users had been looking to certify a class of nearly 7 million account holders. 

Earlier this year, counsel for the users said that the main class would consist of funded account holders who held at least one equity or option position during the March 2 outage, Law360 reported.

Were you impacted by the outages? Let us know in the comments! 

The Robinhood users are represented by Anne Marie Murphy, Mark C. Molumphy, Noorjahan Rahman, Tyson C. Redenbarger and Julia Peng of Cotchett Pitre & McCarthy LLP and Matthew B. George, Kathleen A. Herkenhoff and Laurence D. King of Kaplan Fox & Kilsheimer LLP.

The Robinhood Outage Settlement is In re Robinhood Outage Litigation, Case No. 3:20-cv-01626, in the U.S. District Court for the Northern District of California. 


Don’t Miss Out!

Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!


Read About More Class Action Lawsuits & Class Action Settlements:

We tell you about cash you can claim EVERY WEEK! Sign up for our free newsletter.

The post Robinhood settles class action over service outages appeared first on Top Class Actions.

Robinhood settles class action over service outages