Robinhood limits its financial responsibility if you lose money due to system outages, data errors, or delays in executing your trades, and it will not pay you extra damages beyond your direct loss.
If a Robinhood system outage prevents you from making or canceling a trade, resulting in significant investment losses, this clause significantly limits your ability to recover those losses from Robinhood. The exclusion of consequential and punitive damages means recovery is restricted even in cases of negligence.
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Compare across platforms →During platform outages — which Robinhood experienced notably in March 2020 — customers were unable to trade, but this clause attempts to limit Robinhood's legal responsibility for any resulting investment losses.
REGULATORY FRAMEWORK: Limitation of liability clauses in broker-dealer agreements are reviewed under FTC Act Section 5 (15 U.S.C. §45) for unfair or deceptive practices, and under SEC Regulation Systems Compliance and Integrity (Reg SCI, 17 CFR Part 242) which requires broker-dealers to have robust technology systems and imposes notification requirements for system disruptions. FINRA Rule 4370 (Business Continuity Plans) and FINRA Rule 3110 (Supervision) require adequate system redundancy. State unconscionability doctrine under UCC Article 2 and common law may invalidate overly broad liability limitations.
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