Popular commission-free investing app Robinhood Markets, Inc. is facing a regulatory pressure allegedly due to the March outage which resulted in thousands of dollars of losses, Bloomberg has learned, citing sources familiar with the matter.
Bloomberg states US consumer protection agencies received over 400 complaints about Robinhood over the first half of the year.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.
The main reason for complaints is related to the March market crash when Robinhood ceased its operations for more than a day.
Some say the outage cost thousands of dollars because they failed to sell holdings over technical malfunction. Other complaints claim they missed the opportunity to profit.
The investors also said there was nobody at Robinhood to call for assistance.
"This company’s negligence cost me $6,000. I can not make trades, can not take my own money and can not leave their service," one investor from North Dartmouth, Massachusetts, who lost $20,000.
Bloomberg says the US Securities and Exchange Commission initiated investigation with the Financial Industry Regulatory Authority, to find out how the company handled the March outage.
Previously, iHodl reported that the millennial-focused investment app delayed its launch in the UK as it had faced pressure from US politicians after one of its clients committed suicide.
In an email to people from the waiting list, Robinhood said it had to postpone the launch in UK "indefinitely" in order to respond to the pressure from the domestic market.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.