Robinhood outages $9.9M class action settlement

Robinhood agreed to pay a $9.9 million class action lawsuit settlement to resolve claims that account holders lost money due to March 2020 outages.

The settlement benefits Robinhood account holders who engaged in one of three types of qualifying trades:

• VWAP Loss Traders: Individuals who closed one or more positions on March 3, 2020, at a loss relative to the volume weighted average price (VWAP) of those positions during the March 2 and 3, 2020, outages.
• SPY Options Traders: Individuals who held a Standard & Poor’s depository receipt (SPDR) S&P 500 option position expiring March 2, 2020, and experienced a loss relative to the VWAP of those options during the March 2, 2020, outage.
• Failed Marketable Traders: Individuals who experienced a failed equity trade that became marketable during the March 2 and 3, 2020, outages at a loss relative to the price at the end of the outages and/or the transaction price obtained through March 4, 2020, OR Individuals who experienced a failed equity trade that became marketable during the March 9, 2020, outage at a loss relative to the price at the end of the outage and/or the transaction price obtained through March 10, 2020. 

On March 2, March 3 and March 9, 2020, Robinhood allegedly suffered from outages during which account holders were unable to access their assets. As a result, account holders allegedly lost money as they were unable to make trades and other decisions that could have yielded a significant profit. 

Robinhood is an investment platform that allows consumers to invest in stocks, cryptocurrency and other investments on their own instead of investing through a financial advisor or other professional service.

Robinhood hasn’t admitted any wrongdoing but agreed to a $9.9 million class action lawsuit settlement to resolve these allegations.

Under the terms of the Robinhood settlement, account holders can receive a proportional cash payment based on the economic losses they sustained as a result of the outages. Individuals who were already paid by Robinhood through its Goodwill Program will not receive a settlement payment.

The deadline for exclusion and objection is May 1, 2023.

The final approval hearing for the Robinhood settlement is scheduled for June 15, 2023.

No claim form is required to benefit from the settlement. Class members who do not exclude themselves will automatically receive settlement benefits. 

Who’s Eligible

The settlement benefits Robinhood account holders who engaged in one of three types of qualifying trades:

• VWAP Loss Traders: Individuals who closed one or more positions on March 3, 2020, at a loss relative to the volume weighted average price (VWAP) of those positions during the March 2 and 3, 2020, outages.

• SPY Options Traders: Individuals who held a Standard & Poor’s depository receipt (SPDR) S&P 500 option position expiring March 2, 2020, and experienced a loss relative to the VWAP of those options during the March 2, 2020, outage.
• Failed Marketable Traders: Individuals who experienced a failed equity trade that became marketable during the March 2 and 3, 2020, outages at a loss relative to the price at the end of the outages and/or the transaction price obtained through March 4, 2020, OR Individuals who experienced a failed equity trade that became marketable during the March 9, 2020, outage at a loss relative to the price at the end of the outage and/or the transaction price obtained through March 10, 2020. 

Potential Award

Varies

Proof of Purchase

N/A

Exclusion and Objection Deadline

05/01/2023

Case Name

In re: Robinhood Outage Litigation, Case No. 3:20-cv-01626-JD, in the U.S. District Court for the Northern District of California.

Final Hearing

06/15/2023

Settlement Website

RobinhoodOutagesClassAction.com

Claims Administrator

Robinhood Outage Litigation
PO BOX 3788
Portland, OR 97208-3788
info@RobinhoodOutagesClassAction.com
877-283-6566

Class Counsel

Anne Marie Murphy
COTCHETT PITRE & MCCARTHY LLP

Matthew B George
KAPLAN FOX & KILSHEIMER LLP

Defense Counsel

DEBEVOISE & PLIMPTON LLP

FARELLA BRAUN + MARTEL LLP