Can I Send Demand Letters To Robinhood in Small Claims Court?
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If the last few months are anything to go by, it is evident that the big players hold all the cards when it comes to stock trading. Earlier this year (2021), Robinhood withdrew the GameStop Stop (GME) from its trading platform. This was following the increase of the stock from $39.36 to $347.51 in 6 days. Since that time, the stock has come crashing down with devastating consequences.
This means that the small investors who traded on the Robinhood app either failed to realize their returns or incurred major financial losses. The good news is, however, that for your damages and the amount of money owed.
Reasons to File a Lawsuit Against Robinhood
Brokers like Robinhood are legally and ethically obligated to facilitate customer trades at the best price.
To successfully send demand letters to Robinhood, it should be clear that the trading platform has caused harm to retail investors by preventing them from making profits through either buying stock or selling it short.
Send Demand Letters To Robinhood for Damages
Just days after Robinhood restricted traders from buying GameStop stocks, angry internet users filed dozens of lawsuits against the trading platform, demanding the company to pay up in damages.
Some of the complaints cited that traders of the app could only hold or sell stocks once the share price for GameStop started falling. The complainants felt that this was a deliberate move by Robinhood, claiming that the company conspired and breached antitrust laws by preventing traders from buying stock.
In the above case, Robinhood breached financial regulations under FINRA, by not taking the necessary steps required for the execution of marketable customer orders received fully. Therefore, investors can send demand letters to Robinhood for damages incurred following restrictions on buying stocks.
Send Demand Letters To Robinhood for Negligence
Robinhood, and other trading platforms in general, have a duty to provide a system and a platform that is efficient enough to handle even the highest trading volumes. In case of any outages, there should be backup systems to handle such inconveniences.
Earlier last year, Robinhood had a massive system failure that lasted an entire day. Clients were not able to get access to their money, securities, and properties they kept on the app, let alone to buy or sell securities. Many people incurred significant damages because that was one of the most lucrative days in the stock market.
A Robinhood trader from Sarasota Florida filed a lawsuit against the popular trading app for failure to provide a functioning platform. The company has a user agreement that makes it liable for any interruptions in the market due to technical failures. Therefore, you can send demand letters to Robinhood for negligence.
| Send Demand Letters To Robinhood for Damages | In one case, Robinhood breached financial regulations under FINRA, by not taking the necessary steps required for the execution of marketable customer orders received fully. Therefore, investors can send demand letters to Robinhood for damages incurred following restrictions on buying stocks. |
| Send Demand Letters To Robinhood for Negligence | Robinhood, and other trading platforms in general, have a duty to provide a system and a platform that is efficient enough to handle even the highest trading volumes. In case of any outages, there should be backup systems to handle such inconveniences. |
File a Lawsuit Against Robinhood by Yourself
It is always recommended to hire the services of a professional for any matter. However, if you feel confident that you know what you are getting yourself into, you can file a lawsuit against Robinhood by yourself. If you prefer to follow this route, you will be required to:
- Check if your claim is eligible in a small court
- Generate a demand letter
- Fill in the needed court forms
- File your forms with the court
- Serve Robinhood with the lawsuit
- Show up to your court case against Robinhood
Dangers and Issues With Filing a Lawsuit by Yourself
Although you are allowed to file a lawsuit by yourself if you so wish, this move is highly discouraged unless you have a very deep understanding of how the process works.
It is worth noting that filing a lawsuit independently can be a very long and draining process. The procedure also involves a lot of complicated paperwork. All the documents have to be completed accurately to get approval.
Since the courts are busy and want to keep their caseloads low, any errors in your paperwork will automatically disqualify you. What is more, you will lose the money paid for filing fees and a lot of time. However, even if you do everything correctly, getting your case before the judge is by no means a guarantee that you will emerge the winner.
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