If you used Robinhood’s platform in 2020 and were affected by specific outages that the trading app experienced, you may be eligible for compensation. Robinhood has reached a proposed class action settlement for specific outages and will pay $9.9 million to settle claims surrounding trading losses. Here’s what you need to know:
What’s happened? Robinhood experienced a series of outages in early 2020 that some of its customers allege resulted in trading losses. Robinhood has now agreed to settle a class action lawsuit covering select outages. As part of the settlement, Robinhood has agreed to pay a total $9.9 million.
Has Robinhood admitted wrongdoing? No. As the notice states, “Robinhood denies all allegations of wrongdoing.” However, it says it is agreeing to the settlement to avoid the financial and temporal burden of dealing with a lawsuit.
What outages does the settlement cover? According to the official settlement notice, the settlement covers those who were impacted by two outages, the first happening from March 2-3, 2020, and the last happening on March 9, 2020. The settlement notice states that during these periods “certain trade orders failed to be received and/or executed.”
Who is covered in the Robinhood settlement? The rules are very specific; those covered include Robinhood account holders who experienced losses while making three specific types of trades. Those trades can be found in Section 5 of the notice here.
How much will I get? That depends on how many Robinhood users are eligible for (and claim) compensation. Though the settlement amount is $9.9 million, after attorneys’ fees and other associated costs, approximately $5.5 million will be left to be paid out to affected users. The total amount of compensation will vary depending upon the user’s actual loses and the amount of the Goodwill Program Credit they received from Robinhood in the past.
What do I need to do to receive my settlement? According to the class action website: “If you wish to participate in this Settlement and receive a payment, you do not need to take any action.” If you want to be excluded from the settlement, however, you need to request the exclusion by May 1, 2023.
How will I eventually get my money? If you still have a Robinhood account, you’ll get a direct credit on that account. If you no longer have an account you’ll, get a payment by check. You can also opt to receive the payment digitally.
You can read the complete Robinhood settlement FAQs here.
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