DETROIT, Jan. 07, 2021 (GLOBE NEWSWIRE) -- Liddle & Dubin, P.C. and Ahdoot & Wolfson, PC. have filed a securities fraud class action lawsuit in the United States District Court for the Northern District of California against Robinhood Financial LLC and Robinhood Securities, LLC (collectively, “Robinhood” or “Defendants”) on behalf of all persons in the United States or its Territories who were users of Robinhood between September 1, 2016 and June 30, 2019 (the “Class Period”) and who placed orders in connection with which Defendants received payment for order flow. This group as known as the “Class”.
If you placed orders using the Robinhood platform during the Class Period and wish to apply to be lead plaintiff, a motion on your behalf must be filed with the Court by no later than March 8, 2021. You may contact Nicholas Coulson (ncoulson@ldclassaction.com), an attorney and Partner at Liddle & Dubin, P.C. to discuss your rights regarding the appointment of lead plaintiff or your interest in the class action. You may also retain counsel of your choice and need not take any action at this time to be a class member.
As alleged in the lawsuit, Robinhood, a multi-billion dollar mobile application and website investment service, has capitalized on a surge of first-time market investors by misleading and luring unsuspecting consumers to execute inferior market trades on the platform under the guise of “commission free” trading. 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. 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. The principal trading firms/electronic market makers in turn passed these costs along to Robinhood’s clients on each trade through inferior execution quality—the price at which the requested market orders were executed. Effectively, Robinhood charged backdoor commission fees to each of its clients’ orders, while concealing and denying the payment for order flow scheme.
The Complaint asserts claims for violations of Sections 10(b) of the Securities Exchange Act of 1934, as well as other state law claims under California law against Defendants. The action alleges that during the Class Period, Defendants issued a series of false and/or misleading statements and deliberately failed to disclose material facts. Specifically, Defendants’ representations to its users withheld the fact that in lieu of “commission fees” users were receiving inferior prices on their trades, which in many instances cost them even more than commission fees would have.
You may obtain a copy of the Complaint and inquire about actively joining the class action at
www.LDClassAction.com.
Ahdoot & Wolfson, PC is a nationally recognized law firm founded in 1998 that specializes in complex and class action litigation, with a focus on securities, privacy rights, consumer fraud, anti-competitive business practices, employee rights, defective products, civil rights, and taxpayer rights and unfair practices by municipalities. The attorneys at Ahdoot & Wolfson are experienced litigators who have often been appointed by state and federal courts as lead class counsel, including in multidistrict litigation. In over two decades of its successful existence, Ahdoot & Wolfson has successfully vindicated the rights of millions of class members in protracted, complex litigation, conferring hundreds of millions of dollars to the victims, and affecting real change in corporate behavior.
Liddle & Dubin, P.C., concentrates its practice on prosecuting complex class actions against corporations and governments on behalf of aggrieved individuals. Over its decades of experience, the firm has recovered many millions of dollars on behalf of its clients in class actions. The firm’s attorneys are presently leading major class action litigation pending in federal and state courts throughout the United States.
CONTACT INFORMATION
Nicholas Coulson, Esq.
ncoulson@ldclassaction.com
Liddle & Dubin, P.C.
975 E. Jefferson Ave.
Detroit, MI 48207
Tel: (313) 392-0015
Fax: (313) 392-0025
www.LDClassAction.com