3 ms·

Robinhood's vulnerability is their forced arbitration clause in the ToS. Similar to Doordash: https://www.vox.com/2020/2/12/21133486/doordash-workers-10-millio

by kleton 6y ago

Robinhood's vulnerability is their forced arbitration clause in the ToS. Similar to Doordash: https://www.vox.com/2020/2/12/21133486/doordash-workers-10-million-forced-arbitration-class-action-supreme-court-backfired https://www.vox.com/2020/2/12/21133486/doordash-workers-10-m...

jcranmer 6y ago
If I read Robinhood's ToS correctly, you agree to not arbitrate any claim you bring up in a class action lawsuit.
- Natsu 6y ago
  Who is "you" here? The lead plaintiff is the only one taking it to court and everyone else has the option to opt out if they so desire.
- protomyth 6y ago
  That's actually the problem. Each separate arbitration costs them a bunch of cash. If you run a startup in CA, you might want to look at this language because it could get you in trouble. A class action would probably be cheaper.
  - tgsovlerkhgsel 6y ago
    And if there is something their current user base is good at, it's coordinated mass action. So if this is possible, I expect tens of thousands of arbitration cases to be filed by Monday.
    - chii 6y ago
      I hope that happens. Corporations cannot, and should not be able to TOS their liabilities away.
      - jjeaff 6y ago
        I agree somewhat. But I think your ability to TOS away your liabilities is greatly increased when your service is free.
1vuio0pswjnm7 6y ago
The DoorDash plaintiffs had valid wage claims. Here, according to Reuters' analysis of the agreeement^1, RobinHood plaintiffs do not have a valid contract claim. There is no breach of contract because the agreement specifically allows for RH to silently refuse to execute orders. What can RH customers sue RH for? If there is no valid claim they can make, then there's no possibility of arbitration. 1. https://web.archive.org/web/20200217224304/https://cdn.robinhood.com/assets/robinhood/legal/Customer%20Agreement.pdf https://web.archive.org/web/20200217224304/https://cdn.robin...
- zenexer 6y ago
  It’s currently being widely reported that RH actively closed users’ positions without their permission and refused to let them cancel the trades. While I can’t personally vouch for this being true, if it is, I would expect that’s a little different from “refusal to execute orders.” (As always, take these anecdotes with a grain of salt: even if widely reported, it could very well be untrue.)
  - woah 6y ago
    Those were instances of margin trading. That’s how margin works. If your position is too risky, the people you are borrowing money from can close it out.
    - zenexer 6y ago
      The claims were that they were not margin trading. That’s what made them unique.
- 9387367 6y ago
  Are they allowed to refuse to execute one side of the trade while executing the other side?

by kleton 6y ago

jcranmer 6y ago

If I read Robinhood's ToS correctly, you agree to not arbitrate any claim you bring up in a class action lawsuit.

Natsu 6y ago
Who is "you" here? The lead plaintiff is the only one taking it to court and everyone else has the option to opt out if they so desire.
protomyth 6y ago
That's actually the problem. Each separate arbitration costs them a bunch of cash. If you run a startup in CA, you might want to look at this language because it could get you in trouble. A class action would probably be cheaper.
- tgsovlerkhgsel 6y ago
  And if there is something their current user base is good at, it's coordinated mass action. So if this is possible, I expect tens of thousands of arbitration cases to be filed by Monday.
  - chii 6y ago
    I hope that happens. Corporations cannot, and should not be able to TOS their liabilities away.
    - jjeaff 6y ago
      I agree somewhat. But I think your ability to TOS away your liabilities is greatly increased when your service is free.

1vuio0pswjnm7 6y ago

The DoorDash plaintiffs had valid wage claims. Here, according to Reuters' analysis of the agreeement^1, RobinHood plaintiffs do not have a valid contract claim. There is no breach of contract because the agreement specifically allows for RH to silently refuse to execute orders. What can RH customers sue RH for? If there is no valid claim they can make, then there's no possibility of arbitration. 1. https://web.archive.org/web/20200217224304/https://cdn.robinhood.com/assets/robinhood/legal/Customer%20Agreement.pdf https://web.archive.org/web/20200217224304/https://cdn.robin...

zenexer 6y ago
It’s currently being widely reported that RH actively closed users’ positions without their permission and refused to let them cancel the trades. While I can’t personally vouch for this being true, if it is, I would expect that’s a little different from “refusal to execute orders.” (As always, take these anecdotes with a grain of salt: even if widely reported, it could very well be untrue.)
- woah 6y ago
  Those were instances of margin trading. That’s how margin works. If your position is too risky, the people you are borrowing money from can close it out.
  - zenexer 6y ago
    The claims were that they were not margin trading. That’s what made them unique.
9387367 6y ago
Are they allowed to refuse to execute one side of the trade while executing the other side?