A notice from the Kroll Settlement Administration on January 5 2026 announced the creation of a $2 million settlement fund for customers who held Robinhood brokerage accounts between September 1 2016 and September 1 2018. The notice confirms that a hearing to determine the allocation of the fund will take place on May 5 2026 and that eligible account holders must submit a proof of claim by the deadline specified in the notice to receive a pro‑rata share of the settlement.
Eligible customers are required to file a proof of claim, but the notice does not disclose the exact deadline for submission. The hearing on May 5 will decide how the $2 million will be distributed among the class, with the settlement amount divided proportionally based on the number of qualifying claims. The settlement addresses alleged execution price discrepancies that arose from Robinhood’s order‑routing practices during the specified period.
The lawsuit alleged that Robinhood routed customer orders to market makers that paid the highest payment for order flow, rather than those offering the best prices, thereby violating best‑execution obligations. Plaintiffs argued that this practice caused customers to receive less favorable trade prices than the national best bid or offer on market‑order trades. The settlement resolves these claims by providing a financial remedy to affected account holders, though the exact average payout per eligible customer is not disclosed.
Robinhood has faced a series of regulatory actions in recent years, including a $65 million settlement with the SEC in 2020 over order‑flow disclosure failures and a $45 million settlement in January 2025 for record‑keeping and data‑security violations. The $2 million settlement is modest in comparison, and the company’s financial statements indicate that the impact on its overall results will be negligible. Nonetheless, the settlement underscores ongoing scrutiny of Robinhood’s payment‑for‑order‑flow model and its compliance with best‑execution requirements.
While the settlement fund is small and unlikely to materially affect Robinhood’s current financial performance, it highlights the broader regulatory environment in which the company operates. Investors and regulators will continue to monitor how Robinhood manages order‑routing practices and discloses potential conflicts of interest, as these factors remain central to the firm’s business model and public trust.
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