Robinhood appears to be acting much more like the Sheriff of Nottingham than its namesake.
Digital investing app Robinhood is offering some users $75 compensation following a series of technical outages during the recent market volatility but only on the condition they sign away rights to future legal action.
Earlier this month, free US stockbroking app Robinhood experienced an outage that caused some customers to lose up to tens of thousands of dollars on a day when the US stock market surged by $1.1tr.
At the time rumours swirled that the outage was as a result of the company not taking the extra day in February caused by the leap year into consideration, although this was refuted by the company.
In a statement to users, co-founders Baiju Bhatt and Vladimir Tenev explained the outage was due to: “stress on our infrastructure—which struggled with unprecedented load.”
Following the outage, a spokesperson told TechCrunch that Robinhood would be looking into compensation “on a case-by-case basis”.
Almost immediately after the public outcry following the crash, Robinhood initially said they would start the compensation process by offering its Robinhood Gold customers three months free, the equivalent to $15.
A spokesperson confirmed to AltFi that if users wanted to claim the $75 they would have to sign a document to say they wouldn’t sue the company which they insisted was standard procedure.
The trading app is currently facing three class-action lawsuits in California, Illinois and Florida and when asked if the agreement not to sue was in any way linked to the class actions the spokesperson for Robinhood said they wouldn't comment on ongoing litigation.
The spokesperson for the trading platform also said that in cases where there is little to no data on how much money was lost because of the outage, it is offering $75 compensation and in some cases, this figure is higher, although they declined to comment on how much higher.
Robinhood also declined to reveal how many customers had been impacted by the outage and how many sought compensation as a result.
Some users of the trading app are claiming to have lost tens, if not hundreds, of thousands of dollars as a result of the outage.
In addition to this, Robinhood is only compensating the customers that reached out to them to tell them they were affected.
The most recent offering of compensation will provide little relief for those investors who find themselves severely out-of-pocket, especially now as the stock markets across the globe are nosediving.