Robinhood has agreed to pay a $9.9 million settlement to resolve claims that account holders lost money due to outages that occurred in March 2020. The settlement benefits account holders who engaged in one of three types of qualifying trades. These include 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 2, 2020, outages, 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, and 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.
Robinhood allegedly suffered from outages on March 2, March 3, and March 9, 2020, 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. Under the settlement terms, account holders can receive a proportional cash payment based on the economic losses they sustained as a result of the outages. However, individuals who were already paid by Robinhood through its Goodwill Program will not receive a settlement payment.
Robinhood has not admitted any wrongdoing but agreed to the class action settlement to resolve these allegations. The final approval hearing for the Robinhood settlement is scheduled for June 15, 2023. No claim form is required to benefit from the settlement, and class members who do not exclude themselves will automatically receive settlement benefits. The deadline for exclusion and objection is May 1, 2023. The settlement website is RobinhoodOutagesClassAction.com, and the claims administrator is Robinhood Outage Litigation, with contact information available on the website.
