(Bloomberg) -- Lawyers for Robinhood Markets Inc. said they had reached an agreement in principle to resolve litigation by some investors who were blocked from trading shares in high-flying stocks during an outage in March 2020. No details were disclosed.
“Once final details are resolved, and within 60 days of this notice, the parties will file a motion for preliminary approval of the settlement,” the attorneys said in a federal court filing Thursday.
Multiple investors sued Robinhood in several states, mostly alleging restrictions by the trading platform that amounted to a breach of contract, court records show. Cases in California were consolidated with a federal judge in San Francisco.
Read More: Robinhood Trading Site Seizes Up, Customers Miss Stock Rally
The outage was a blow to the Silicon Valley startup, which drew in young, often inexperienced investors with an easy-to-use trading app. Robinhood popularized the zero-commission brokerage and introduced millions of millennials and Gen Zers to financial markets. Critics, including some US lawmakers, say it encourages risky frequent trading by novices.
The case is In re Robinhood Outage Litigation, 20-cv-01626, US District Court, Northern District of California (San Francisco).
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