
Robinhood accused of offering snafu credits to squelch suit - rococode
https://www.bloomberg.com/news/articles/2020-03-27/robinhood-accused-of-offering-credits-for-snafu-to-squelch-suits
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JumpCrisscross
> _accused of offering a “$75 goodwill credit” to dupe customers into waiving
> their legal rights_

Curious to see what the e-mails look like. On one hand, settling a claim is a
real thing. The present value of $75 may exceed the expected claim the
recipients would receive out of the suit.

On the other hand, we're in the midst of record joblessness and a pandemic-
induced liquidity squeeze. If it's dangling cash without informed consent, it
could be construed as bad-faith negotiating.

~~~
toomuchtodo
Some have received far more after rejecting this offer, in some case thousands
of dollars depending on the loss demonstrated. (/r/wsb)

~~~
JumpCrisscross
> _Some have received far more after rejecting this offer... /r/wsb_

This is rational for Robinhood, so I'm not dubious. But is there a reliable
source?

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toomuchtodo
Only folks I’ve talked to on Reddit, no one has provided a settlement
agreement and proof of payout. I’ll ask around if someone is willing to show
docs.

~~~
kevindong
This Reddit post [0] provided a screenshot of the agreement [1] which, if
real, is surprisingly short.

[0]:
[https://www.reddit.com/r/wallstreetbets/comments/fox6cr/robi...](https://www.reddit.com/r/wallstreetbets/comments/fox6cr/robinhood_settlement_compensation_from_outage/)

[1]:
[https://preview.redd.it/6jrlfyiuqvo41.png?width=661&format=p...](https://preview.redd.it/6jrlfyiuqvo41.png?width=661&format=png&auto=webp&s=952adf73b544ae07091d5b12fe9bd782505ba31c)

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AndrewBissell
Between this kind of chicanery and their constant coding goofs, keeping your
money at Robinhood just seems like a great way to wind up standing in line at
SIPC waiting for your account to be reimbursed someday. Now that they've
pushed lots of other brokers into fee-free trading I don't know what the
appeal is.

I worked in algorithmic trading for about 4 years. In that time, I witnessed
the market find and exploit the tiniest, most inconsequential-seeming bugs in
my code in ways I could never have imagined or planned for. Finance and "move
fast and break things" just do not mix. Someday, I expect to see a news
headline about how some HFT sharks on Wall Street found a way to take
Robinhood and its clients for billions, and that will be the end of it.

~~~
ornornor
Wasn’t there a famous broker that also had a bug in their software and it
ended up losing them hundreds of millions over a few hours of trading which
put them under? I can’t remember any more details than that, anyone knows what
I’m talking about?

~~~
aweinstock
The Knight Capital incident lost $440m in 45 minutes to a mistake in software
deployment:
[https://en.wikipedia.org/wiki/Knight_Capital_Group#2012_stoc...](https://en.wikipedia.org/wiki/Knight_Capital_Group#2012_stock_trading_disruption)

~~~
ornornor
Yes that’s the one I was thinking about.

~~~
AndrewBissell
Knight's clients remained whole from that debacle because they were
capitalized enough to absorb the losses, and if I remember correctly another
broker stepped in to take on their clients as well. Knight was also not really
servicing retail clients.

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theartfuldodger
On their previous outage/lockout they offered me a $75 gift card.

I included the same offer email as a forward to finra and they offered me $725
shortly after.

I accepted.

They may have lost me the opportunity to have had 10k profit, but maybe I
wouldn't have held, who knows, but by a fluke I came out 2.5k ahead after
being locked out of my account for 3 days.

I took all my cash out that day so didnt have anything in play for this
outage.

I actually tried to transfer in money that morning but that failed too.

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gowld
I wouldn't worry. Class action suits almost always settle for a large amount
but tiny per class member. So by buying off some people early, the remainder
each get a larger share of the class action settlement.

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brentis
Given how they monetize their users, i wouldnt be suprised if it was to dupe
customers.

