Key Takeaways:
- Robinhood settled a $9 million class-action lawsuit in Washington for unsolicited text messages from its “refer-a-friend” program, violating state laws.
- The settlement, approved by U.S. District Judge Barbara Rothstein, includes $2.2 million in attorney fees.
- Despite the settlement, Robinhood plans to acquire Bitstamp to enhance institutional trading, amid ongoing legal challenges.
Robinhood has settled a class-action lawsuit in Washington for $9 million due to unsolicited text messages sent through its “refer-a-friend” program, which violated state consumer protection laws.
U.S. District Judge Barbara Rothstein approved the settlement, which includes $2.2 million in attorney fees, calling it fair given the case’s complexities and risks.
📰 Robinhood agrees to pay $9 million in settlement of class action lawsuit over unapproved refer-a-friend program, as approved by a federal court, reports Cointelegraph. 💼⚖️ #BitcoinWorld
— BitcoinWorld Media (@ItsBitcoinWorld) July 18, 2024
The lawsuit, filed on behalf of Washington residents who received these texts between August 2017 and February 2024, except those who consented, claimed the messages breached the state’s Commercial Electronic Mail Act and Consumer Protection Act.
Following the settlement news, Robinhood’s stock fell 1.8% to $24.18 in after-hours trading but has doubled since the beginning of the year.
Robinhood Agrees to $9 Million Settlement Over Unsolicited Text Messages
— Decrypt (@decryptmedia) July 18, 2024
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Despite this legal setback, Robinhood plans to acquire the Bitstamp crypto exchange to boost institutional trading in the U.S., even as it faces other legal challenges, including potential SEC action over its crypto trading operations.
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