Can I Send Demand Letters To Robinhood in Small Claims Court?

Disclaimer: DoNotPay.com is not a law firm and is not licensed to practice law. This guide is meant to provide generic information on how to protect your rights and petition the government. This guide does not reflect the services provided by DoNotPay.com. Please do your own research.

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.

Let the AI Consumer Champion Save the Day for Your Customer Service Issues

DoNotPay's AI Consumer Champion has made it easier than ever to resolve customer service issues. Whether you want to make a complaint, demand a refund, or negotiate a bill, we've got you covered. Here's how our Customer Service Issues product works:

Log in to DoNotPay and select "Other Customer Service Issues".
Tell us your side of the story. Simply select the option that best fits your request, answer a few questions, and you're all set.
Sit back and relax. DoNotPay's AI will make your demands for you. You can easily track progress and get updates, stress-free and hassle-free!