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`Tina Wolfson, CA Bar No. 174806
`twolfson@ahdootwolfson.com
`Theodore Maya, CA Bar No. 223242
`tmaya@ahdootwolfson.com
`AHDOOT & WOLFSON, PC
`10728 Lindbrook Drive
`Los Angeles, California 90024
`Tel: 310-474-9111;
`Fax: 310-474-8585
`
`Counsel for Plaintiffs
`
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`Case No. 20-cv-3218
`
`CLASS ACTION COMPLAINT
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`JARED FREEDLAND, DAVID
`KOSTENKO, and ROMEO TORO,
`individually and on behalf of all others
`similarly situated,
`
` Plaintiffs,
` v.
`
`ROBINHOOD MARKETS, INC.,
`ROBINHOOD FINANCIAL LLC,
`ROBINHOOD SECURITIES, LLC, and
`Does 1-10,
`
` Defendants.
`
`
`
`
`
`
`
`CLASS ACTION COMPLAINT, CASE NO. 20-CV-3218
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`

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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 2 of 19
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`Plaintiffs Jared Freedland, David Kostenko, and Romeo Toro (collectively,
`“Plaintiffs”), by and through their counsel, bring this Class Action Complaint against
`Defendants Robinhood Markets, Inc., Robinhood Financial, LLC, and Robinhood
`Securities, LLC (collectively, “Defendants,” or “Robinhood”), on behalf of themselves
`and all others similarly situated, and allege, upon personal knowledge as to their own
`actions and their counsel’s investigations, and upon information and belief as to all other
`matters, as follows:
`
`PARTIES
`1.
`Plaintiff Jared Freedland is an individual and a resident of Tampa, Florida,
`who has used Robinhood for approximately 3-4 years.
`2.
`Plaintiff David Kostenko is an individual and a resident of Tacoma,
`Washington, who is a user of Robinhood who experience significant losses as a result of
`the outages that affected Defendants’ trading platform, as alleged below.
`3.
`Plaintiff Romeo Toro is an individual and a resident of Hampton, Virginia,
`who used the Robinhood app for approximately one year before the March 2 outage
`described below.
`4.
`Defendant Robinhood Markets, Inc. is a Delaware corporation with its
`principal place of business at 85 Willow Road, Menlo Park, California 94025. Defendant
`Robinhood Markets is the corporate parent of Defendants Robinhood Financial LLC and
`Robinhood Securities, LLC.
`5.
`Defendant Robinhood Financial LLC is a Delaware LLC with its principal
`place of business at 85 Willow Road, Menlo Park, California 94025. It is registered with
`the U.S. Securities & Exchange Commission (“SEC”) as a brokerage firm (SEC#: 8-
`69188). Defendant Robinhood Financial has a clearing arrangement with its affiliate,
`Defendant Robinhood Securities.
`6.
`Defendant Robinhood Securities, LLC is a Delaware LLC with its principal
`place of business at 85 Willow Road, Menlo Park, California 94025. It is a registered
`with the SEC as a brokerage firm (SEC#: 8-69916). Defendant Robinhood Securities
`
`
`
`2
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`clears trades introduced by its affiliate, Defendant Robinhood Financial.
`7.
`Plaintiffs are unaware of the true names and capacities of the defendants
`sued as DOES 1-10, and therefore sue these defendants by fictitious names. Plaintiffs
`will seek leave to amend this Complaint when and if the true identities of these DOE
`defendants are discovered. Plaintiffs are informed and believe and thereon allege that
`each of the defendants designated as a DOE is responsible in some manner for the acts
`and occurrences alleged herein, whether such acts or occurrences were committed
`intentionally, negligently, recklessly or otherwise, and that each said DOE defendant
`thereby proximately caused injuries and damages to Plaintiffs as herein alleged, and is
`thus liable for the damages suffered by Plaintiffs.
`JURISDICTION AND VENUE
`8.
`This Court has subject matter jurisdiction over this action under 28 U.S.C. §
`1332(d)(2), in that the matter is a class action wherein the amount in controversy exceeds
`the sum or value of $5,000,000, exclusive of interest and costs, and members of the Class
`are citizens of states different from Defendant.
`9.
`This Court has personal jurisdiction over Defendants because they are
`headquartered in this District.
`10. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(1) because
`Defendants reside here, and under 28 U.S.C. § 1391(b)(2) because a substantial part of
`the events and omissions giving rise to this action occurred in this District.
`FACTUAL BACKGROUND
`11. Robinhood was founded in 2013 and presented to consumers as a free, easy-
`to use investing and stock trading platform, accessible via a smartphone app, which offers
`commission-free stock trades.
`12. However, Robinhood is only able to offer commission-free trades by taking
`advantage of its consumers.
`13. Robinhood primarily generates revenue by selling its clients’ market order
`flow data to market makers. When Robinhood receives orders from clients, instead of
`
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`executing those orders on the exchanges itself, it sells the right to fill those orders to other
`parties — market makers — who can then execute the trades privately instead of on the
`open market in the exchange.
`14. Robinhood also generates revenue by earning interest on idle cash in its
`investors’ accounts.
`15. Market makers give Robinhood a payment for order flow (“PFOF”) in
`exchange for the right to execute Robinhood’s customers’ orders. Because Robinhood
`does not execute the orders itself, and because there is no exchange fee that has to be
`paid, it keeps costs low and is able to offer free trading. The market makers use the order
`data to make a spread executing the market orders. They pay Robinhood the PFOF as a
`“rebate” based on the dollar amount of each trade executed.
`16. Robinhood has grown rapidly since inception. The company has raised over
`$1 billion in venture capital through private offerings.
`17. Most recently, on May 4, 2020, Robinhood announced a $280 million Series
`F funding at an $8.3 billion valuation. <https://blog.robinhood.com> (last visited May
`11, 2020).
`18. Plaintiffs are informed and believe that Robinhood has more than 10 million
`accountholders.
`19. Robinhood’s marketing is geared primarily toward younger investors.
`20. Robinhood
`falsely
`advertises
`its
`app
`as
`“reliable”
`(e.g.,
`<https://robinhood.com/us/en/support/articles/whats-clearing-by-robinhood/>
`(last
`visited May 8, 2020)), and as allowing
`investors
`to “trade
`in real
`time”
`(<https://robinhood.com/us/en/> (last visited May 8, 2020)).
`21. Robinhood experienced a number of outages during which investors using
`its platform were unable to execute trades, including on March 2-3, and 9, 2020.
`22. These outages took place at a time when the U.S. stock market has been
`experiencing extreme volatility due to economic fallout related to the COVID-19 virus,
`and attendant economic shutdowns intended to slow the spread of that virus. As a result,
`
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`investors’ losses were, predictably, higher as a result of Robinhood’s outages than they
`likely would have been but for such volatility.
`23. During such turmoil, investors need access to and control over their
`investments in order to protect them.
`24. Defendants voided a sell option due to these outages and, as a result, Mr.
`Freedland lost approximately $1300, instead of making approximately $100 in profit that
`he otherwise would have realized from that option.
`25. Defendants’ outages caused Mr. Toro to miss a trade and thereby lose
`approximately $47,000 in profit.
`26. Defendant’s outages caused approximately $2000 in losses to Mr. Kostenko,
`not including any profits he potentially could have made.
`27. On March 3, 2020, Defendants admitted that “[t]he outages you have
`experienced over the last two days are not acceptable.” <https://blog.robinhood.com>
`(last visited May 11, 2020). In that same blog post, Defendants attributed “the cause of
`the outage” to “stress on our infrastructure — which struggled with unprecedented load.”
`Id.
`
`28. Robinhood also reassured its investors that it was “upgrad[ing] our
`infrastructure” (id.) but, nonetheless, additional outages occurred.
`CLASS ACTION ALLEGATIONS
`29. Plaintiffs seek relief in their individual capacity and as representatives of all
`others who are similarly situated. In accordance with Fed. R. Civ. P. 23(a) and (b)(2)
`and/or (b)(3), Plaintiffs seek certification of a nationwide class (hereinafter, the “Class”)
`preliminarily defined as follows:
`All Robinhood accountholders within the United States as of
`March 2, 2020.
`30. Excluded from the Class are Defendants, including any entity in which any
`Defendant has a controlling interest, is a parent or subsidiary, or which is controlled by
`any Defendant, as well as the officers, directors, affiliates, legal representatives, heirs,
`
`
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`5
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`predecessors, successors, and assigns of any Defendant. Also excluded are the judges
`and court personnel in this case and any members of their immediate families.
`31. Numerosity. Fed. R. Civ. P. 23(a)(1). The members of the Class are so
`numerous that the joinder of all members is impractical. While the exact number of Class
`members is unknown to Plaintiffs at this time, Defendants are believed to have in excess
`of 10 million accountholders.
`32. Commonality. Fed. R. Civ. P. 23(a)(2) and (b)(3). There are questions of
`law and fact common to the Class, which predominate over any questions affecting only
`individual Class members. These common questions of law and fact include, without
`limitation:
`a. Whether Defendants’ trading platform was inadequate to handle reasonably
`foreseeable demand;
`b. Whether Defendants failed to provide contingencies to customers to execute
`timely trades in the event of an outage;
`c. Whether Defendants violated rules promulgated by the Financial Industry
`Regulatory Agency (“FINRA”), including Rules 4370 and 5310;
`d. Whether Defendants violated state consumer protection laws by failing to
`disclose that their trading platform infrastructure was inadequate and unable
`to handle foreseeable, high-volume, market activity;
`e. Whether Defendants breached legal, regulatory, and licensing requirements
`by failing to provide adequate access to financial services in a timely
`manner;
`f. Whether Defendants breached their contracts with Class members, and/or
`the implied covenant of good faith and fair dealing, in connection with the
`outages and Defendants’ failure to provide financial services in a timely
`manner;
`g. Whether Defendants were negligent or grossly negligent in failing to provide
`financial services in a timely manner due to their inadequate technology;
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`CLASS ACTION COMPLAINT
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`h. Whether Defendants were unjustly enriched by their conduct;
`i. Whether Defendants breached fiduciary duties owed to customers by failing
`to provide adequate access to financial services in a timely manner;
`j. Whether Plaintiffs and the other Class members were injured by Defendants’
`conduct, and if so, the appropriate class-wide measure of damages,
`restitution, and other appropriate relief; and
`k. Whether Plaintiffs and the other Class members are entitled to injunctive
`and declaratory relief.
`33. Ascertainability. All members of
`the purposed Class are readily
`ascertainable. Defendants have access to addresses and other contact information for all,
`or substantially all, members of the Class, which can be used for providing notice to many
`Class members.
`34. Typicality. Fed. R. Civ. P. 23(a)(3). Plaintiffs’ claims are typical of those
`of other Class members because Plaintiffs, like every other Class member, were unable
`to execute trades during the above-described outages.
`35. Adequacy of Representation. Fed. R. Civ. P. 23(a)(4). Plaintiffs will fairly
`and adequately represent and protect the interests of the members of the Class. Plaintiffs’
`Counsel are competent and experienced in litigating class actions.
`36. Superiority of Class Action. Fed. R. Civ. P. 23(b)(3). A class action is
`superior to other available methods for the fair and efficient adjudication of this
`controversy because joinder of all members of the Class is impracticable. Furthermore,
`the adjudication of this controversy through a class action will avoid the possibility of
`inconsistent and potentially conflicting adjudication of the asserted claims. There will be
`no difficulty in the management of this action as a class action.
`37. Class certification is also appropriate under Fed. R. Civ. P. 23(a) and (b)(2),
`because Defendants have acted or has refused to act on grounds generally applicable to
`the Class, so that final injunctive relief or corresponding declaratory relief is appropriate
`as to the Class as a whole.
`
`
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`7
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 8 of 19
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`COUNT I
`Breach of Contract
`38. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`39. The Customer Agreement that Plaintiff and Class Members entered into with
`Robinhood Financial LLC and Robinhood Securities, LLC is a contract.
`40. This contract was drafted by Defendants and their agents and presented to
`Plaintiff and Class members — individual consumers — on a take-it-or-leave it basis.
`There was no negotiation of the terms of the contract.
`41. Defendants furnished consideration to Plaintiffs and other Class members in
`the form of access to Defendants’ online trading platform, enabling them to trade
`securities and options listed on U.S. securities exchanges. In exchange, Defendants
`received consideration from Plaintiffs and other Class members including but not limited
`to order flow data, which Defendants sold to market makers to generate revenue, interest
`generated on cash balances in accounts, interest on margin extensions, and fees.
`42. During the outages of March 2, 3, and 9, 2020, Defendants breached their
`contractual duty to Plaintiffs and other Class members by failing to provide access to
`their accounts, equites, and money,
`though Defendants nonetheless received
`consideration from Plaintiffs and other Class members in the form of order flow data,
`interest, account fees, and fees.
`43. Defendants’ breach deprived Plaintiffs and other Class members of the
`ability to manage their investments during the outages alleged above, which occurred a
`period of extremely high market volatility.
`44. As a proximate result of Defendants’ breach, Plaintiffs and other Class
`members have been damaged, and did not receive the full benefit of their bargain.
`45. Accordingly, Plaintiffs and other Class members are entitled to damages
`and/or restitution in an amount to be proven at trial.
`
`
`
`
`8
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 9 of 19
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`COUNT II
`Breach of the Implied Covenant of Good Faith and Fair Dealing
`46. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`47. As alleged above, Plaintiffs and other Class members entered into binding
`and enforceable contracts with Defendants.
`48. Plaintiffs and other Class members entered into this contract with the
`expectation that Defendants would not do anything to injure the right of Plaintiff and
`Class Members to receive their benefits from the contract, including their ability to access
`securities markets.
`49. Defendants violated the covenant of good faith and fair dealing implied in
`its contracts with Plaintiffs and other Class members, including by:
`a. Failing to disclose that their platform was not adequately built or maintained
`to provide the promised financial services;
`b. Failing to provide financial services during the outages because they lacked
`infrastructure and systems to ensure that they could perform pursuant to their
`contracts with Plaintiffs and other Class members;
`c. Failing to provide an alternate means for customers to place timely trades in
`the event its platform was not reliably providing financial services;
`d. Failing to execute trades and other requested customer actions promptly and
`fully (as also required by FINRA Rule 5310); and
`e. Failing to comply with all applicable legal, regulatory, and licensing
`requirements.
`50. Plaintiffs and other Class members gave consideration that was fair and
`reasonable, and performed all conditions, covenants, and promises required under their
`agreements with Defendants.
`51. As a result of Defendants’ breach of the implied covenant of good faith and
`fair dealing, Plaintiff and proposed class members are entitled to damages and/or
`
`
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`9
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`restitution in an amount to be proven at trial.
`COUNT III
`Breach of Fiduciary Duty
`52. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`53. As licensed providers of financial services, Defendants at all times relevant
`herein were a fiduciary to Plaintiffs and other Class members and owed them the highest
`good faith and integrity in performing financial services on their behalf.
`54. Defendants breached their fiduciary duties to Plaintiffs and other Class
`members by:
`a. Failing to disclose that Defendants’ financial services platform was not
`adequately built or maintained such that it could not reliably provide
`financial services;
`b. Failing to provide financial services during the outages because Defendants
`lacked infrastructure and systems to ensure that they could perform their
`obligations under their contracts with Plaintiffs and other Class members;
`c. Failing to provide an alternate means for customers to place timely trades in
`the event its platform was not reliably providing financial services;
`d. Failing to execute trades and other requested customer actions promptly and
`fully (as required by FINRA Rule 5310); and
`e. Failing to comply with all applicable legal, regulatory, and licensing
`requirements.
`55.
` Defendants’ conduct caused Plaintiffs and other Class members harm,
`losses, and damages, and continues to expose them to harm because Defendants continue
`to breach their fiduciary duties.
`56. Defendants’ conduct damaged Plaintiffs and other Class members in an
`amount to be determined at trial or separate proceedings as necessary.
`
`
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`10
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`CLASS ACTION COMPLAINT
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`COUNT IV
`Negligence
`57. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`58. Defendants were obligated to exercise a reasonable degree of care, skill, and
`ability that is ordinarily employed by registered securities broker-dealers when
`developing and providing trading services to Plaintiffs and other Class members, to
`ensure that Defendants’ trading platform was designed to handle foreseeable market
`fluctuations that could affect system stability, and to provide alternate access to Plaintiff
`and other Class members in the event of a failure.
`59. Through the design, testing, implementation, maintenance, and updating of
`Defendants’ trading platform, a reasonable degree of care would have ensured that
`Defendants’ system would not crash on the dates the outages occurred.
`60. A reasonably prudent broker-dealer would have provided an alternate
`method for its clients to manage their accounts in the event of a website and/or application
`failure that prevented direct trading.
`61. Defendants breached their duty to exercise reasonable care by failing to
`provide Plaintiffs and other Class members with a trading platform that could remain
`operational under high volume, including on the outage dates. Defendants further
`breached their duty to exercise reasonable care by failing to provide Plaintiffs and other
`Class members with any alternate means of accessing and managing their accounts when
`the system failed.
`62. As a direct, reasonably foreseeable, and proximate result of Defendants’
`failure to exercise reasonable care, Plaintiffs and other Class members suffered damages
`that they could not have prevented through the exercise of reasonable diligence.
`63. Plaintiffs and other Class members seek monetary damages for these harms
`and other recovery as allowed by law.
`
`
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`CLASS ACTION COMPLAINT
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`

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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 12 of 19
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`COUNT V
`Gross Negligence
`64. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`65. Defendants owed a duty to Plaintiffs and other Class members to exercise
`reasonable care in developing and operating Defendants’ trading platform, so as to ensure
`that the service could handle reasonably foreseeable levels of trading volume without
`crashing.
`66. Defendants breached this duty by failing to develop a service capable of
`functioning during increased volume that was entirely foreseeable.
`67. Defendants further breached this duty by failing to implement a back-up
`system to ensure account and market access for clients in the event of a system failure,
`even though such potential failure was foreseeable.
`68. The foreseeability of the causes of Defendants’ system failure, during the
`type of market activity that virtually ensures that investor losses due to such outages will
`be amplified, evidences a conscious disregard for the rights of Plaintiffs and other Class
`members.
`69. Defendants’ breach of their duty to provide a suitably stable trading platform
`and backup contingency to its clients directly produced losses for Plaintiffs and other
`Class members. But for Defendants’ breach, Plaintiffs and other Class members would
`not have been damaged.
`
`70. Because of Defendants’ gross negligence, Plaintiffs and other Class
`members have been damaged in a similar manner.
`71. Plaintiffs and other Class members seek monetary damages for these harms,
`including punitive damages, and other recovery as allowed by law.
`
`
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 13 of 19
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`COUNT VI
`Violation of California’s Consumers Legal Remedies Act,
`Cal. Civ. Code §§ 1750, et seq.
`72. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`73. Plaintiffs and all Class Members are “consumers” as defined by Cal. Civ.
`Code § 1761.
`74. Defendants are “persons” which, by advertising, soliciting, offering, and
`providing a service to Plaintiff and Class Members, engaged in “transactions” intended
`to result in the sale of “services” to any consumer, as those terms are defined by Cal. Civ.
`Code § 1761.
`75. Defendants’ acts and practices in connection with their deficient financial
`services violate § 1770 of the Consumers Legal Remedies Act in at least the following
`ways:
`
`a. Defendants represents that their services have characteristics, uses, or
`benefits that they do not have;
`b. Defendants advertise their services with intent not to sell them as advertised;
`c. Defendants represent that their services are of a particular standard, quality,
`or grade that those services do not in fact meet;
`d. Defendants advertised their services with intent not to supply reasonably
`expectable demand; and
`e. Defendants represent that their services have been supplied in accordance
`with a previous representation which they do not in fact meet.
`76. Defendants failed to disclose that the services offered were inadequate to
`handle foreseeable demand on their trading platform. At the time of the transactions,
`Defendants were aware of the capabilities of their own system and were aware, or through
`the exercise of due diligence should have been aware, that trading volume could, and
`likely would, exceed what their platform was capable of handling, causing damage to
`
`
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`13
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 14 of 19
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`their clients.
`77. Defendants’ advertising of their services stated they granted access to
`markets, but at lower prices than other online trading services. This advertising led
`consumers to believe that Defendants offered a service comparable to other providers in
`the industry, when in fact Defendants’ service was deficient in its capacity and had no
`contingency plan, either electronic or by personal customer service, in the event of a
`system failure like the outages that occurred.
`78. As a result of Defendants’ violations of the CLRA, Plaintiffs and other Class
`members, who would not have used Defendants’ services had the limitations and risks
`been disclosed, have been damaged by losing funds held in their Robinhood accounts,
`and profits they otherwise would have made, in an amount subject to proof at trial.
`79.
`In accordance with Cal. Civ. Code § 1782(a), contemporaneously with this
`filing Plaintiffs are sending a notice letter to Defendants to provide them with the
`opportunity to correct their business practices. Should Defendants decline to do so,
`Plaintiffs will amend this complaint to add a demand for damages.
`80.
`In accordance with Cal. Civ. Code § 1780, Plaintiffs seek an order enjoining
`Defendants from the unlawful practices described above, a declaration that Defendants’
`conduct violates the Consumers Legal Remedies Act, and reasonable attorneys’ fees and
`costs of litigation.
`81.
`In accordance with Cal. Civ. Code § 1780(d), filed concurrently herewith is
`the Declaration of Tina Wolfson showing that this action has been commenced in the
`proper forum.
`
`COUNT VII
`Violation of California Unfair Competition Law, Bus. & Prof. Code § 17200, et seq.
`82. Plaintiffs incorporate the substantive allegations above as if fully set forth
`
`here.
`
`83. California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code
`§§ 17200 et seq., prohibits any “unlawful, unfair, or fraudulent business acts or
`
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`14
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 15 of 19
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`practices.”
`84. Defendants’ business acts and practices, as alleged above, are unlawful in
`that they violate the Consumers Legal Remedies Act, Cal. Civil Code §§ 1750, et seq.
`and FINRA Rule 5310 (which requires execution of orders fully and promptly).
`85. Defendants’ violated § 17200 by knowingly advertising, soliciting, offering,
`and providing Robinhood services which were inadequately designed to handle
`reasonably foreseeable market activity and had no redundancy or backup procedures, and
`omitting mention this to consumers. Further, Defendants failed to warn Plaintiff and other
`consumers of the risks attendant to a failure of their systems.
`86. Defendants’ conduct was unscrupulous, offended established public policy,
`and was fraudulent.
`87. The harm caused by Defendants’ conduct greatly outweighs any benefit to
`consumers.
`88. Plaintiffs and other Class members relied on the misrepresentations and
`omissions of Defendants with respect to the reliability and lack of greater risk associated
`with the use of Robinhood services. Plaintiffs and other Class members would not have
`used Defendants’ services, and/or would not have paid as much for them, but for
`Defendants’ misrepresentations and omissions. As a result of the conduct alleged herein,
`Plaintiffs and other Class members suffered injuries in fact and lost money.
`89. Plaintiffs and other Class members are entitled to restitution, injunctive
`relief, and reasonable attorney’s fees and costs.
`COUNT VIII
`Unjust Enrichment
`90. Plaintiffs incorporate the substantive allegations above as if fully set forth
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`here.
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`91. Defendants obtained financial benefit from Plaintiffs and other Class
`members.
`92. Plaintiffs and other Class members conferred benefit on Defendants in the
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`Case 4:20-cv-03218-DMR Document 1 Filed 05/11/20 Page 16 of 19
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`form of valuable order flow data, income on idle account balances, account fees, interest
`on margin extensions, and debit card interest and fees.
`93. Defendants were aware or should have been aware of the limitations of their
`trading platforms and computer systems but failed to adequately warn prospective clients
`of these shortcomings.
`94. Defendants were aware or should have been aware that such limitations were
`material considerations that prospective clients would want to consider before using
`Defendants’ services.
`95.
`It would be inequitable to permit Defendants to retain revenue generated
`from their contractual relationship with Plaintiffs and other Class members, in spite of
`their failure to perform their contractual duties and their failure to warn Plaintiffs and
`other Class members of the dangerous deficiencies of Defendants’ services.
`96. Plaintiffs and other Class members are entitled to restitution or disgorgement
`of, or the imposition of a constructive trust upon, all profits, benefits and other
`compensation obtained by Defendants through their deceptive, misleading, and improper
`conduct.
`
`REQUEST FOR RELIEF
`WHEREFORE, Plaintiffs, individually and on behalf of all Class members
`proposed in this Complaint, respectfully request that the Court enter judgment in their
`favor and against Defendants, as follows:
`A.
`For an Order certifying this action as a class action and appointing Plaintiffs
`and their counsel to represent the Class;
`B.
`For an award to Plaintiffs and other Class members of their actual damages,
`punitive damages, and any other form of monetary relief allowed by law;
`C.
`For an award to Plaintiffs and other Class members of restitution,
`disgorgement, or other equitable relief as the Court deems proper;
`D.
`For equitable relief enjoining Defendants from engaging in the wrongful
`conduct complained of herein and requiring Defendants to implement reasonable systems
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`CLASS ACTION COMPLAINT
`CASE NO. 20-CV-3218
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`1

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