Your shares may be lent to parties betting against the stocks you own, and Robinhood profits from this without compensating you, while you retain dividend-equivalent payments instead of actual dividends, which may have different tax treatment.
This agreement significantly limits your legal recourse by requiring all disputes with Robinhood to be resolved through FINRA arbitration and waiving your right to participate in class action lawsuits. Robinhood retains the right to liquidate your investment positions without prior notice if margin requirements are not met, which can result in sudden and potentially significant financial losses. You can opt out of the arbitration clause by sending written notice to Robinhood within 30 days of account opening, as specified in the agreement.