US Judge Denies Restraining Order Against Robinhood

A United States District Judge has denied an Emergency Motion for Temporary Restraining Order against Robinhood after attorneys of the lawsuit that was filed in federal court in Florida asked the judge to stop Robinhood from sending “misleading communications.”

At the beginning of March, Robinhood experienced a system-wide outage that locked out 10 million users from their accounts during sharp swings in the stock market. As Finance Magnates reported at the time, the outage was caused by an unprecedented load on the firm’s infrastructure.

The outage has led to one Robinhood user, Travis Taaffe (Plaintiff), to file a lawsuit against the stock trading company, in which he has launched three claims against Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC (the Defendants) - breach of contract, breach of implied warranty of merchantability, and negligence.

Following the system outage, Robinhood offered its users a “goodwill credit of $75” to compensate users for their loss in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term for their signatures on a “DocuSign” document 36 hours before the Plaintiff filed the Motion.

Plaintiff: Robinhood fails to identify waiver of rights

The Plaintiff was trying to get a temporary restraining order and preliminary injunction against Robinhood to stop them from doing this, as the Plaintiff claims that this “DocuSign” document includes a complete waiver of rights, which the company fails to identify or otherwise reference for its users.

According to the document, part of the communication is as follows: “Thanks so much for your patience as we evaluated the impact of the outage on your account. Based on our review, we’re able to offer you a goodwill credit of $75.00. To accept this offer, please review and sign the agreement that will be sent to you from Robinhood via DocuSign, which includes references to your incoming credit.”

According to the court document seen by Finance Magnates, Charlene Edwards Honeywell, United States District Judge, found that the Plaintiff failed to establish a clear record of abusive communications by Defendants, and therefore the motion was denied on the 31st of March, 2020 in Tampa, Florida.