Initial Lawsuit
First Complaint - 12/23/2020A Robinhood user filed a class action on behalf of all people in the United States or its Territories who were users of Robinhood between September 1, 2016, and June 30, 2019, and who placed orders in connection with which Robinhood’s received payment for order flow.
- Filing Date
12/23/2020 - Class Period
09/01/2016 to 06/30/2019 - Transgression
Securities Violation - Filing Firms
Liddle & Dubin, P.C.
Ahdoot & Wolfson, P.C. - Case Title
Lemon v. Robinhood Financial LLC - Docket Number
3:20-cv-09328 - Court
California Northern District Court - Free File
Complaint
Allegations
Excerpt
“Through a process of deceit and omission, Defendants misled consumers and failed to disclose that Robinhood’s business operations relied extensively upon “payment for order flow,” in which Defendants received payment from market makers in exchange for executing the service’s trades.
These payments often came at the expense of the consumer. While Defendants promoted and advertised an easy-to-use “commission free” trading platform, Defendants profited extensively from unsuspecting consumers who executed trades on Defendants’ platform at inferior execution prices compared to what consumers would have received from Robinhood’s competitors. For larger value orders, this price differential often exceeded the commission its competitors would have charged. These inferior prices were caused in large part by the unusually high charges Robinhood required from principal trading firms for the opportunity to obtain Robinhood’s customer order flow.”
Defendants
- Company
Robinhood Financial LLC - Company
Robinhood Securities, LLC
