Robinhood Financial LLC is facing a class-action lawsuit, following social media outrage over outages of its services during the early days of March 2020. According to a report from ClassAction.org, during the Dow Jones Industrial Avera, S&P 500 and Nasdaq saw large gains during this time, and many users of the famous app were not able to access their accounts.
According to the report, users were not able to get access to "cash, securities, or other property kept on the Robinhood platform".
"since the outages on March 2 and 3, many Robinhood users have claimed they lost out on thousands of dollars while calling on regulators to look into precisely what went wrong with the commission-free app"
The lawsuit claims that Robinhood Financial LLC and Robinhood Securities LLC were not able to provide a working platform for their clients, giving them no access to their property.
Robinhood is a commision-free trading application that works via could-based services as "alternatives to traditional in-person or by-phone financial services", according to the lawsuit. Its worth is $7.6 billion as of July 2019.
The story goes that on March 2, 2020, the Dow Jones average gained more than 1294 points. S&P 500 and Nasdaq had a similar rise, with S&P 500 gaining 136 points and Nasdaq gaining 384 points. During these gains, the Robinhood app was unable to provide services to its clients and in such, preventing them from engaging in any trading or manage any of their funds saved within the application.
The alleged charge against Robinhood is that they were not able to provide a stable and reliable platform "robust enough to handle all possible reasonable volumes of trading" nor have any systems in place as safeguards to handle any service disruptions.
If you are affected by the Robinhood outage, and would like to be part of the class action settlement, you do not need to do much in your part as the case is not settled yet. Although it has a long way to go, once a settlement is reached you will be able to join the settlement and possibly see compensation.