HOOD.US
id: 824
Robinhood ($HOOD) Investor Settlement
The parties have reached an agreement to settle the case, but the terms are still being finalized.
N.D. California
Court4:20-cv-09328
Case number09/01/2016
Class period Start06/16/2020
Class period EndRobinhood has reached a settlement with $HOOD investors to resolve claims that it misled customers by promoting “commission-free” trading.
US-based Users who traded through Robinhood between September 1, 2016, and June 16, 2020, suspect the Company's receipt of payment for order flow was causing them to get unfavorable market prices on their orders.
- Robinhood, in its capacity as a broker, received payment for order flow from market makers to which it routed its client’s orders. Meanwhile, $HOOD was bound by a duty of best execution.
- Users believed that his market orders would be executed by Robinhood at the best available price, and he was unaware that the Company was receiving compensation directly related to their orders as payment for order flow.
- Users did not know that Robinhood’s receipt of payment for order flow was causing him to receive such unfavorable market prices on his orders.
- By receiving higher payments for order flow than its competitors, Robinhood negatively impacted, among other things, its clients’ order execution and chances for price improvement.
Users suspect Robinhood's agents and executives knew the 'commission-free' trading promise wasn't really free and that the fees imposed on trading firms resulted in poor execution for clients.
As a result, Users suspect that Robinhood misled them about "commission-free" trading and failed to provide the best execution, causing them material harm in the form of economic loss due to their orders going unfilled, underfilled, filled at a sub-optimal price, or filled in a manner that adversely affected the order’s performance post-execution.
Case Type
US Securities Class Action
Case Status
Tentative Settlement
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Filing date
12/23/2020
Plaintiffs
Ji Kwon
Attorneys
Ahdoot & Wolfson, P.C. (Burbank, CA), Bursor & Fisher, P.A. (Miami, FL), Liddle Sheets Coulson P.C. (Detroit, MI)
Defendants
Robinhood Financial LLC
Judge
Hon. Yvonne Gonzalez Rogers
Trades matching type
FIFO
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