Robinhood Stock Halt Class Action Denied Class Certification on Technicality

Robinhood Stock Halt Class Action Lawsuit Overview:

• Why: Robinhood’s fiduciary duty falls under California law, not Florida law.
• Who: A Florida federal judge denied class certification for a Robinhood class action lawsuit.
• Where: The class action lawsuit was filed in Florida federal court.

A Florida federal judge denied class certification for a class action lawsuit that would have included Robinhood customers who were allegedly burned by the company’s failure to inform them of a trading halt, resulting in massive investment losses. 

The class action lawsuit, with Shterna Pinchasov as lead plaintiff, claims that Robinhood shirked its fiduciary duty — the responsibility to act in customers’ best interests — when it failed to notify customers of its trading halt on Hertz Corp. in March 2020. 

The complaint focused on Florida law, while Robinhood’s fiduciary duty is governed by California law, concluded U.S. District Judge Cecilia M. Altonaga. 

“Because plaintiff has not briefed the court with the correct law, she has failed to meet her burden of proof in establishing the propriety of class certification,” stated the order denying certification of a Class of Robinhood investors. “Plaintiff is not entitled to the extraordinary remedy of class certification.” 

Pinchasov’s counsel plan to file a motion for reconsideration of the order, reports Law360. 

Robinhood Stock Halts Prompt Class Action Lawsuits by Investors

A series of stock halts by Robinhood has prompted legal action by investors who say they lost money to the unilateral actions of the online trading platform. 

Indeed, Robinhood recently made another bid to dump a class action lawsuit, this one claiming restrictions imposed during January’s “meme stock” trading hysteria involving GameStop and other stocks of high volatility cost investors billions.  

Earlier this month, a Robinhood investor filed a class action lawsuit against the investment company and its partner trading firm accusing them of failing to act in investors’ best interests by employing a payment for order flow revenue system that denied customers the best possible trading prices.

Do you invest with Robinhood? Did you feel burned by its Hertz trading halt? Sound off in the comments below!

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