Robinhood faces a new class action suit for outages
On March 12, the Robinhood trading platform suffered technical difficulties throughout the day. Robinhood users were not able to trade their securities on the platform for approximately 16 hours. Coincidentally, this was then the largest one day point gain in the Dow Jones stock market index history.
According to Mr Queen, on February 28, he purchased put contracts on the Robinhood app. He then initiated a sell order for the contracts on March 2. Queen was, however, not able to access the sell order for the whole day. Moreover, Robinhood resolved in cancelling the sell order on the morning of March 3. Queen ended up selling his contracts at a lower price.
Technical faults far from over
Despite Queen being able to dispose of his contracts at a lower price, the technical faults at Robinhood were not over yet. The app went offline again for over three hours that same day. It was alleged that the fault was due to an unusual overload because of a record number of trades.
The cryptocurrency trading platform further suffered more outages on March 9, a week after the previous outage. Users were completely unable to purchase or sell securities in the public markets. Coincidentally, the stock market plunged at this similar time with the Dow Jones dropping 2,000 points while the NASDAQ index plunged by 7.3%. Further issues were experienced on March 12.
Platform users were annoyed for losing out due to the string of outages on the platform. However, Robinhood is trying to win back its clients by use of credits, with the dollar amount being determined on a case-to-case basis. This move doesn’t seem to have appeased the discontented users who have now filed a class-action suit.
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