Can I Sue Robinhood in Small Claims Court?
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 you can sue Robinhood for your damages and the amount of money owed.
DoNotPay is an AI-powered app that helps you file your case against Robinhood in a small claims court. You can get access to the DoNotPay chatbot via any browser. You will be asked a few easy-to-answer questions about your case to make the process easy.
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 sue 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.
Sue 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 sue Robinhood for damages incurred following restrictions on buying stocks.
Sue Robinhood for Negligence
Robinhood, and other trading platforms in general, have a legal 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 sue Robinhood for negligence.
|Sue 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 sue Robinhood for damages incurred following restrictions on buying stocks.|
|Sue Robinhood for Negligence||Robinhood, and other trading platforms in general, have a legal 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 legal 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 legal 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.
How to Sue Robinhood With DoNotPay
It can be very intimidating to sue a big trading platform like Robinhood. The silver lining is that you do not have to go through this alone. Taking advantage of our digital service will make it easier for you to get the compensation you need. To effectively use DoNotPay to sue Robinhood, you will need to follow a few easy steps:
- Log into your DoNotPay account
- Select Sue Now
- Enter the dollar amount you are owed
- Select whether you prefer a demand letter or court filing forms
- Describe the reason for the lawsuit and submit any applicable details that support your argument, including photo proof
And just like that, you are done with the process! Once we receive this information, we automatically generate the required paperwork and submit it to the involved parties to get your lawsuit started.
What Else Can DoNotPay Do?
DoNotPay is a helpful tool in suing any company in small claims court without a lawyer. Check out the following companies that DoNotPay has helped sue:
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