Robinhood ‘Concealed’ Costs Of Trading, Users Say
Elise Hansen, 24 March 2021
Securities-trading app Robinhood failed to secure the best possible execution for many of its trades, a practice that according to regulators cost users roughly $34 million, a proposed class of users told a California federal court.
Customers Isaac Landreth and Jaime Marquez alleged Tuesday that they had invested tens of thousands of dollars using Robinhood’s trading platform, but that the company failed to properly explain how it made money and at times gave customers a worse deal than its competitors.
“[Robinhood] omitted, concealed, and misrepresented its order flow practices and its execution quality to continue growing its customer base and encourage its customers to continue trading,” the complaint said.
The suit names Robinhood Financial LLC and two affiliates and aims to pull together a class of users who placed trade orders with Robinhood from about September 2016 through June 2019.
