Furthermore, the plaintiffs cited a New York Times article stating that Robinhood lured “inexperienced investors into the riskiest trading” by using a “Silicon Valley playbook of nudges and notifications.”
The class members also quoted an analyst at Sumner Capital who pointed out that “Robinhood’s app has slick interfaces” with confetti popping everywhere.” The online brokerage firm treated trading as a game and presented it as an investment.
“Unfortunately for many Americans, losing investment and retirement funds or accruing colossal debt is not a game, and the consequences have been tragic,” as written in the complaint.
In June, a 20-year-old Robinhood user who did options trading committed suicide. In his final note, the young inexperienced investor expressed his anger toward the online brokerage firm and admitted that he had “no clue” of what he was doing. He got depressed and took his own life when his Robinhood account showed he had a negative cash balance of $730, 165. He probably thought he was already buried in so much debt.
Robinhood allegedly abandoned users during the outages
The two firms representing the plaintiffs amended the complaint, which was initially filed on March 4, days after Robinhood’s operating system crashed for almost a day when the stock market experienced a significant upside. The system suffered more outages in March and in June.
