Envision being reimbursed for any losses sustained as a result of being unable to access the Robinhood platform. That prospect has become a reality now that Robinhood has reached a settlement in a class action lawsuit. Learn how customers of this well-known online broker can benefit from the settlement and get their money back in this article.

Learn How Robinhood Users Scored Big After Outages

Users of Robinhood who made one of these eligible trades mentioned below may profit from the settlement:

SPY Options Traders

People who lost money on a Standard & Poor’s depositary receipt (SPDR) S&P 500 holding with an expiration date on or before March 2, 2020, are called SPY Options Traders. They are measured against the VWAP of those options due to an outage that occurred on or before March 2, in the year 2020.

VWAP Loss Traders

People who closed their positions on the 3rd of March in 2020, incurring a loss compared to the volume-weighted average price (VWAP) of the same positions during the outages on March 2 and 3 of 2020, are classified as VWAP Loss Traders.

Failed Marketable Traders

These are people whose equity trades went through during the outages on March 2 and 3 in the year 2020 but sold at a discount to the closing price and their transaction price as of March 4, 2020. It is also referred to people who attempted but failed to execute an equity trade on March 9, in the year 2020, but whose fintech stocks became marketable during the outage at a discount to their value when compared to the transaction price acquired through the 10th of March in the year 2020.

Robinhood’s Lawsuit Settlement Comes to the Rescue

Due to service disruptions, Robinhood users say they were locked out of their accounts on March 2, March 3, and March 9, in the year 2020. Account holders allegedly suffered financial losses because they were prevented from making trades and other decisions that could have given them substantial gains.

Robinhood is an online brokerage that eliminates the need for customers to work with an intermediary or a financial advisor when buying and selling tech stocks, cryptocurrencies, and other investments. Although Robinhood did not acknowledge guilt in the settlement, it will pay $9.9 million to end the class action lawsuit against it.

Account holders will receive a monetary payout equivalent to the economic losses they incurred due to the outages, per the conditions of the Robinhood settlement. Those who have previously received compensation from Robinhood through the Goodwill Programme will not be eligible for a settlement. May 1, 2023, is the cutoff for withdrawal and protest. The Robinhood settlement’s final clearance hearing is expected on June 15, 2023.

All About Outages to Refunds- Discover if Robinhood Owes You Money

You may be entitled to compensation if you used Robinhood’s platform in 2020 and were negatively impacted by certain outages the trading app encountered. To resolve claims regarding trading losses, Robinhood has suggested a $9.9 million class action compensation for some outages. What you must know is as follows. After service interruptions in 2020, Robinhood may be obligated to pay you back. Here is the list of questions commonly running through all our minds.

What’s going on? Some Robinhood users claim they lost money when trading due to the platform’s spate of outages in early 2020. Robinhood has reached a settlement with the plaintiffs in a class action lawsuit regarding certain service disruptions. Robinhood has consented to pay a total of $9.9 million as a settlement.

What are the outages that are covered by the settlement? The settlement letter states that it applies to anyone affected by two power outages: one on March 2 or 3, 2020, and another on March 9, 2020. According to the settlement notification, “certain trade orders were not executed or received” at these times.

How much will you get? It all depends on how much of a Goodwill Programme Credit the user has already gotten from Robinhood and how much money the user actually lost. After deducting attorneys’ fees and other costs from the $9.9 million settlement sum, only about $5.5 million is expected to be available to compensate affected users. That is contingent upon the number of Robinhood customers who are compensated.

What must I do to get my settlement money? The website for the class action lawsuit states, “If you want to get involved in this settlement or get a payment, you need not undertake any action.” However, you must submit a request for exclusion from the settlement no later than May 1, 2023.

When will my money be transferred to me? The funds will be deposited there if you still have an active Robinhood account. If you no more have access to your account, your funds will be sent to you via cheque. Digital payment options are also available.

Also Read: All About the Best Fintech Stocks to Add to Your Portfolio

All About Customers’ Lawsuit Shedding Light on Robinhood’s Trading Costs

On Wednesday, a U.S. judge stated that Robinhood NASDAQ Markets Inc would be facing a lawsuit filed by clients who claimed the online trading platform misled them by calling some deals “commission free” when they weren’t. Yvonne Gonzalez Rogers, U.S. District Judge, made a statement that people who purchased and sold assets on Robinhood’s platform had legal standing to file a class action lawsuit against the company.

In Menlo Park, California, Robinhood was charged with concealing that it relied mainly on “remuneration for order flow,” paying “unusually high” charges to third-party broker-dealers who handled consumer trades. Customers, led by Californian Ji Kwon, said they were responsible for these expenses and often received poorer trade prices than they would have gotten at commission-based competitors. They claimed this “materially compromised” Robinhood’s need to offer competitive pricing and trade execution.

Robinhood argued that the action should be dismissed based on a recent decision from the federal level in Manhattan since the clients weren’t claiming any discrepancies about the sponsors of their securities. But in a ruling on January 11 that allowed investors to sue Lucid Group Inc (LCID.O), the maker of luxury electric cars, the judge dismissed that argument and ruled it.

Last but not least
Requests for a response from Robinhood and its attorneys went unanswered. Class members are all U.S. residents who used Robinhood and made transactions for which the company was compensated for order flow between September 1, 2016, and June 16, 2020.