Robinhood has offered $16.5 million to settle a class action alleging that it paid customers too little interest on uninvested cash, Bloomberg reported.
Why it matters
The case puts the treatment of idle customer cash at a brokerage under scrutiny. Interest on uninvested balances can affect the return customers receive while money is not held in investments.
Market impact
The $16.5 million offer would resolve the claims through a settlement if accepted. The allegations concern cash interest rather than the performance of customers' investments.
Frequently asked questions
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How much has Robinhood offered to settle the case?
Robinhood has offered $16.5 million to settle the class action, Bloomberg reported.
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What do the claims against Robinhood concern?
The class action alleges that Robinhood paid customers too little interest on their uninvested cash.
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What type of customer balance is at issue?
The claims concern uninvested cash, rather than the performance of customers' investments.
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Why does interest on uninvested cash matter to brokerage customers?
It affects the return customers receive while their money is not held in investments.
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Has the Robinhood settlement been accepted?
Robinhood has made a settlement offer. Acceptance of the offer has not been established.
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