Robinhood and Reddit protected from lawsuits by user agreement, Congress

Well, here's a very clear message showing how little #s the government give about people.

Multiple class action lawsuits have been filed against Robinhood for their halting of retail trades during the GameStop rally. However, the majority of those lawsuits are expected to fail because apparently

Robinhood is not legally bound to carry out every trade and the lawsuits will not succeed without evidence the company restricted trading for an improper reason, such as to favor certain investors, according to several legal experts.

Despite the obvious fact Robinhood's actions were specifically to block retail traders, while allowing hedgefunds to continue to trade to protect their own parent fund Citadel.

But I guess, the all powerful, one sided 'terms of service' strikes again. Ya know, the only kind of legal agreement you don't actually sign, have zero say in the terms, are typically full of legally questionable things that likely won't be held up in court and which can be changed at any time without notice.

#, I wish I could use a business contract that allowed me to change the terms any time I wanted and force the client to agree, that'd be awesome. Just think, you could jack your rate up any time, just quit the job in the middle and still demand pay, sell all my client's personal information just because, well they agreed to it, well they agreed to it after I changed the contract without notice that is, but meh # it, that's how terms of services work.

Awww but shucks, that only works online I guess, in the real world, businesses aren't allowed to pull such bull#.

www.reuters.com...

Robinhood Markets Inc’s user agreement is likely to protect the brokerage app from a barrage of lawsuits filed by customers after it blocked a frenzied trading rally in companies such as GameStop Corp that was fueled on social media forums.

At least a dozen proposed class action lawsuits accuse Robinhood of breaching its contract with customers when it restricted trading on Thursday.

Robinhood’s users were at the center of this week’s wild rally in a handful of stocks that had been heavily shorted by hedge funds and championed by individual investors in online chatrooms including Reddit’s WallStreetBets.

The lawsuits, brought in federal court, allege that the Menlo Park, California-based company breached its contractual obligation as a regulated broker to execute orders promptly and effectively.

However, Robinhood is not legally bound to carry out every trade and the lawsuits will not succeed without evidence the company restricted trading for an improper reason, such as to favor certain investors, according to several legal experts.

The user agreement on Robinhood’s website says it “may at any time, in its sole discretion and without prior notice to Me, prohibit or restrict My ability to trade securities.”

But the customers are unlikely to clear preliminary court hurdles to get to the point where they can demand documents and depositions to investigate Robinhood’s actions, said Ann Lipton, a professor at Tulane University Law School.

She said attempts to sue brokers for mishandling customer accounts have generally been unsuccessful due to limits that federal securities law places on the filing of class actions. For example, a federal judge in 2019 dismissed a proposed class action against TD Ameritrade Holding Corp for allegedly mismanaging a tax feature of certain accounts.

Can’t wait for wallstreet to be burned down after the inevitable hedgefund bailout.

People should really look through the user agreement line for line instead of scrolling past everything to click yes

a reply to: TzarChasm

And then what? Go to one that doesn’t? That doesn’t exist for many of the things they put on these user agreements. The blanket user agreements need to stop.

The answer is DeFi.

Let the old system burn

originally posted by: TzarChasm
People should really look through the user agreement line for line instead of scrolling past everything to click yes

Ya I always read all 300 pages of them...

What a shock, looks like the courts will save congress from having to choose between their jobs and appeasing their masters.

while its obvious to anyone with an ounce of common sense the halt was purely to help the hedge managers, common sense does not equal evidence in the court.

ETA: on a side note, I read on reddit that Fidelity did not restrict trading through this last week, in part because they had a 10% stake in gamestop in one of their mutual funds.

a reply to: dug88

The people still have the power to delete there accounts. That will send a pretty powerful message. You can't stay in business without any customers.