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Robinhood will pay $ 9.9 million as compensation in the case of technical failures
Robinhood will pay $ 9.9 million to a group of customers who filed a lawsuit against an online broter for systematic failures in his application. According to the plaintiffs, their damage was reached $ 20.4 million.
Stock-Trading App Robinhood Has Agreed to Pay $ 9.9 Million in Cash to a Proposed Class of Users Suing Over Repeated Service Outages. https: // t.Co/Wqurr9VGL
– Law360 (@law360) August 9, 2022
The collective lawsuit filed 150,000 platform users.
The parties agreed on pre -trial settlement.
“The deal […] provides tangible and immediate compensation for such processes”, – says in the statement.
Claims to Robinhood are related to the incident on March 2, 2020. On that day, the stock market demonstrated the highest growth in history at that time, but the platform worked incorrectly until the next trading session.
In the middle of the year, numerous lawsuits against Robinhood were united in one in the Federal Court of California.
The proposed settlement determines the three circumstances that may include in the transaction. Payments will apply to users who:
- closed at least one position with a loss of March 3 compared with the average price during the failures on March 2 and 3;
- incurred losses by a certain type of option position, the duration of which expired on March 2;
- recorded losses due to unfulfilled transactions.
Deputy Chief Law Gagarin News Council Robinhood Cheryl Krampton said that the online Broker is glad to achieve an agreement. The company representative recalled that since the beginning of 2020, she invested significant funds in the development of the platform.
Recall that in December 2020, the marketing activity of Robinhood attracted the attention of the Department of Securities of the Secretariat of the Commonwealth of Massachusetts. They stated that the platform exposes customers “unjustified trading risks” and “does not comply with fiducial standards”.
In the same month, the SEC achieved $ 65 million from Robinhood for misleading users by the statement that the service does not charge trade fees.
In July 2021, the online Broker undertook to pay a fine of $ 70 million for resolving the conflict with the US Office for Control in the Financial Industry.
In October of the same year, Robinhood added round -the -clock support of users by phone.
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