Robinhood Financial Apologizes To Investors For Outages
If you are an investor who recently sustained losses through Robinhood Financial’s investing platform, contact our investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) today.
Robinhood Financial, which provides an online platform that facilitates stock, exchange-traded funds (ETFs), and other investment trades without charging commissions, recently experienced technical snafus that caused major outages and prevented trading on March 2nd and March 3rd.
Now, the company has sent a letter to customers apologizing for the glitches and asked them to identify which positions they think may have been affected so that the Robinhood team can assess each claim.
For the past few weeks, SSEK Law Firm has been speaking to investors throughout the US who’ve suffered massive losses in the wake of market volatility wrought by the novel coronavirus (COVID-19). While the upheaval caused by the pandemic is out of anyone’s control, fraud or negligence by brokers, brokerage firms, and trading platforms may have further exacerbated these losses.
Technical Problems Placed Robinhood Under Scrutiny Even Before COVID-19
The outages on Robinhood’s trading platform early last month lasted long enough that on March 2nd alone, a day when there were record-breaking gains, none of its users were able to profit. This alone could be grounds for an investor claim for losses.
Not only that, but it took almost a full day before Robinhood Financial issues some sort of explanation for what had happened, citing an “unprecedented load” to the site that caused a DNS system failure that also shuttered its App and Help center.
The outages are not the first time that glitches have exposed Robinhood users to risks. In 2019, Robinhood Financial ordered by the Financial Industry Regulatory Authority (FINRA) to pay a $1.25M fine for best execution violations and inadequate supervision related to equity orders that took place in 2016 and 2017. Also last year, another technical problem allowed users to trade stock using free cash. A different glitch caused certain Robinhood users’ passwords to be stored improperly in a readable format.
If more technical difficulties on Robinhood were to occur during COVID-19, this could mean more investor losses, many of whom are already suffering because of how the pandemic is impacting their portfolios, the markets, the economy, their jobs, and their health.
Investor Fraud Claims Against Robinhood Financial
Please contact our Robinhood investment fraud lawyers so we can help you determine whether you have grounds for a claim.
Inadequate supervision, improper handling of investors’ portfolios and accounts that expose them to unnecessary risks, failure to execute trades, breach of fiduciary duty, failure to apprise investors of potential risks, breach of contract, and other violations and negligence can lead to unnecessary losses.
It is important that you speak with an experienced investor fraud law firm before agreeing to any type of compensation or settlement for any investment losses. To do so otherwise could prevent you from maximizing your financial recovery. Allow us at SSEK Law Firm to help you explore your legal options during your free, no-obligation case consultation.