Robinhood Faces Court Order Over Referral Program Violations
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A federal judge has ruled that Robinhood must pay $9 million to settle a lawsuit over its referral program, which was found to breach consumer protection laws by sending unsolicited messages.
On July 17, Judge Barbara Rothstein of the U.S. Western District Court of Washington issued the ruling against Robinhood, as reported by Unchained.
The lawsuit, initiated by Andrew Gillette and Cooper Moore, claimed that Robinhood’s “refer-a-friend” program violated the Consumer Protection Act by sending unsolicited referral texts to residents of Washington State between August 2017 and February 2024.
The settlement includes $2.2 million for attorney fees and around $142,400 for litigation expenses, with Gillette and Moore each receiving $10,000 for their roles in the case.
The judge deemed the settlement terms fair and appropriate, considering the complexities and costs associated with the litigation. This ruling highlights the legal risks companies face when their marketing practices violate consumer protection standards.
Following the settlement announcement, Robinhood’s stock dropped by 1.8% on July 18, reflecting investor concerns over the company’s legal and regulatory challenges.
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