A federal judge in the United States has approved a $9 million settlement in a class-action lawsuit against crypto and stock trading platform Robinhood.
On July 17, Robinhood Financial LLC was ordered to pay $9 million to settle a lawsuit over its “refer a friend” program, which enabled the sending of unsolicited text messages in Washington.
Consumer protection laws have been violated
Judge Barbara Rothstein of the U.S. District Court for the Western District of Washington granted the plaintiff’s motion that the lawsuit violated state consumer protection laws and awarded $2.2 million in attorney fees, bringing the final approval to a $9 million settlement.
Judge Rothstein stated that she found the settlement terms to be fair, reasonable and adequate “in light of the complexity, expense and duration of the litigation, and the risks associated with assessing liability and damages.”
Terrell Marshall Law Group and Berger Montague filed the class action on behalf of all individuals who received a text message from the Robinhood referral program and were Washington state residents from August 2017 through February 2024. However, it excluded those who had consented to receive text messages from the Robinhood referral program.
Robinhood’s “refer a friend” program allowed users to generate and send text messages to their phone contacts through the trading app inviting them to join the platform, in violation of the Commercial Electronic Mail Act and Washington state’s Consumer Protection Act, the 2021 lawsuit said.
Robinhood shares (HOOD) fell 1.8% on July 18 to close at $24.18 in after-hours trading. However, the trading firm’s stock has doubled since the beginning of the year.
This isn’t the first time Robinhood has found itself in legal hot water. In May, the U.S. Securities and Exchange Commission issued a notice of intent to take legal action against the company, alleging that its crypto trading activities violated securities laws. That didn’t stop the company from expanding its crypto ambitions, however, with the acquisition of leading crypto exchange Bitstamp in June.
Source: https://newsbit.nl/rechter-keurt-schikking-van-9-miljoen-goed-in-rechtszaak-tegen-robinhood/
