Robinhood suffers online outage as market advances

Robinhood suffers online outage as market advances
As U.S. stocks headed for their first gain in eight sessions, the online brokerage had technical issues
MAR 02, 2020
By  Bloomberg

Robinhood Markets Inc. customers experienced technical issues on the company’s online service when U.S. markets opened on Monday morning and the outage lasted the entire U.S. trading day, preventing customers from making trades as stocks surged after last week’s rout.

The systemwide issue began as the markets opened, with clients unable to access their accounts. Almost two hours later, Robinhood Markets Inc. said the problem had been identified and its staff was working on a fix. By 4 p.m. in New York, access had not been restored.

https://twitter.com/AskRobinhood/status/1234509495084240898?s=20

Clients blasted the closely held company on social media for not being able to make trades.

“One of the most anticipated trading days and your service is down at market open,” one user wrote. Another user said: “What is going on -- I can’t do any trades -- you will lose me as customer going forward. This ridiculous.”

Downdetector, a website that tracks real-time outages online, reported the issue at the market open.

The failure was a setback for a Silicon Valley startup that has sought to lure young, tech-savvy investors who want to trade entirely online. Founded in 2013, the Menlo Park, Calif., company made a name for itself by offering commission-free trading on a mobile app. Since then, it has garnered millions of customers and a valuation of $7.6 billion.

Financial technology companies may have difficulty dealing with higher trading volume in more volatile markets, said Craig Pirrong, professor of finance at the University of Houston. “Particularly, is the technology scalable enough to handle the amount of orders they’re getting?” he said.

Recently, much larger competitors including Charles Schwab Corp. and Fidelity Investments have dropped some trading fees, essentially matching Robinhood’s offering. Companies including Jack Dorsey’s Square Inc. have also started offering the ability to trade stocks for free.

U.S. stocks surged the most in 14 months Monday as investors gained confidence that central banks would intervene to mitigate the economic impact of the coronavirus. Last week, the S&P 500 Index suffered its worst week since 2008.

During the market decline, Fidelity and Schwab customers experienced technical issues that were quickly repaired.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.