$2M Robinhood Settlement Ends Lawsuit Over Backdoor Trading Fees

New to ClassAction.org? Read our Newswire Disclaimer

Robinhood Financial has agreed to a $2,000,000 settlement to resolve a class action lawsuit that alleged the online trading and investment platform misled novice investors to make inferior market trades under the pretext of “commission-free” trading.

Don’t miss out on class action settlement news like this. Sign up for ClassAction.org’s free weekly newsletter.

The Robinhood Financial class action settlement received preliminary approval from the court on December 5, 2025, and covers all United States consumers who were customers of Robinhood at any point between September 1, 2016 and September 1, 2018 and placed one or more “qualifying trades” on the platform. These qualifying trades reportedly include market orders (not limit orders or stock orders) for buying and selling stock, wherein:

• The price the order was filed at upon purchase was higher than the National Best Offer at the time the order was routed; and
• The price the order was filed at upon selling was lower than the National Best Bid at the time was routed.

Notably, the agreement stipulates that the aggregate difference between the stock buying/ selling execution price and the National Best Offer or National Best Bid must have been greater than $5 in order for a transaction to be considered a “qualifying trade”. Court documents indicate that approximately 56,805 individuals are set to be covered by the settlement.

The court-approved website for the Robinhood class action settlement can be found at RobinHoodOrderFlowSettlement.com.

According to the settlement website, Robinhood settlement class members who currently have an active Robinhood account in good standing will automatically receive a one time, pro-rated cash payment of approximately $17.60. This the final amount of payment, the agreement explains, will be a share of what remains in the net settlement fund after any taxes, notice and administration costs, and attorneys’ fees have been paid out.

Settlement class members without an active Robinhood account in good standing must submit a timely, valid claim form to receive their approximately $17.60 cash payout, the site reports.

To submit a Robinhood settlement claim form online, class members can head to this page and enter the unique class member ID found on their copy of the settlement notice.

Alternatively, class members can download a PDF of the claim form here, complete it, and return it by mail to the address of the settlement administrator listed on the first page of the document.

All Robinhood Financial settlement claim forms must be submitted online or postmarked by July 13, 2026.

The court will decide whether to grant final approval to the Robinhood settlement at a hearing on Tuesday, May 5, 2026. Compensation will be distributed to class members only after final approval is granted and any appeals are resolved.

The Robinhood Financial class action lawsuit alleged that the online trading and investing company took advantage of inexperienced consumers by encouraging them to execute inferior trades under the guise of commission-free trading that actually had hidden backdoor fees.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest class action settlements.