If you have suffered losses as the result of Robinhood Financial as the result of system errors, outage, or the erroneous account deactivation by Robinhood, please call 303-300-5022 or 1-844-253-5858 (toll-free). Jeffrey Pederson is an attorney who represents investors concerning brokerage fraud and negligence. Initial consultations are free and confidential. We have spoken with a number of investors and may be able to help.
In April 2023, Robinhood agreed to pay a $10.2 million penalty to state regulators because of system issues. These regulators charged Robinhood with failing to prevent system interruptions the online brokerage commonly experienced. Such outages occurred frequently over the previous five years.
Service interruptions can prevent an investor from timely making trades and can cause options to expire worthless. Consequently, this payment represents just a fraction of investor loss and does not prevent investors from pursuing additional losses from Robinhood.
On or about January 29, 2021, March 3, 2020 and December 12, 2018, Robinhood deactivated a number of accounts. After deactivating the accounts, it gave investors no ability to reach their funds. No telephone access was given to these investors.
The account deactivations left investors without means to execute trades. These innocent investors lost tens of thousands, and in some instances hundreds of thousands, of dollars as a result of Robinhood’s system failure.
Robinhood’s response is to offer $50 Amazon gift cards. Robinhood also sent investors correspondence acknowledging the problem. Unfortunately, like the gift cards, this does little help investors.
Similar system failure occurred on February 8, 2019. Over 700 investors submitted complaints that they could not make trades because of the outage. The cases against Robinhood must be sought by demanding FINRA arbitration because of FINRA rules mandating arbitration of investor complaints. FINRA is the self-regulatory organization that oversees brokerages like Robinhood.
Brokerage firms and investors are required to arbitrate through the FINRA forum. While most attorneys have no experience handling cases in such a forum, we have handled hundreds of FINRA arbitration cases over the past 19 years.
We have spoken with a number of individuals who sustained substantial losses by losing access to their portfolio. If you have suffered such losses, please call to discuss your rights and chances for recovery.