Robinhood agrees to settle customer lawsuit over 2020 outages
By Jody Godoy
(Reuters) – Robinhood Markets Inc has agreed in precept to settle a proposed class motion filed by prospects in america who claimed the funding app’s outages in March 2020 shut them out of buying and selling on pandemic-related volatility.
The corporate filed discover of the pending cope with a San Francisco federal courtroom on Thursday, saying it was resolving particulars of the settlement and would search courtroom approval of a settlement inside 60 days. Court docket papers didn’t disclose how a lot Robinhood can pay to settle the motion, which sought damages for a category of all U.S. customers who held inventory or choices throughout a service outage on March 2, 2020.
The lawsuit additionally seeks damages for some customers who misplaced cash due to outages on March 2, 3 and 9, 2020.
A spokesperson for Robinhood declined to touch upon Friday.
Robinhood shares had been buying and selling at round $10.38 on Friday afternoon, up round 11.9% from Thursday’s shut.
The Menlo Park, California-based firm, which marketed itself as democratizing finance, rode a surge of curiosity in inventory buying and selling from retail traders throughout the pandemic, however has since confronted authorized challenges from customers claiming the app didn’t stay as much as its guarantees.
The lawsuit in San Francisco alleges Robinhood outages precipitated customers to lose cash once they couldn’t commerce. The customers accused Robinhood of negligence, breach of contract, violating California’s truthful enterprise legal guidelines and different claims.
Different customers sued after Robinhood briefly restricted buying and selling in January 2021 throughout a rally in Gamestop Corp, AMC Leisure and different so-called “meme shares.” A choose dismissed the proposed class motion in January, saying such restrictions had been allowed below Robinhood’s buyer settlement.
(Reporting by Jody Godoy; Enhancing by David Gregorio)
