DRN-6261259

The complaint Mr W complains Robinhood U.K. Ltd failed to safeguard him from a “pump and dump” investment scam. What happened The facts of this case are well known to both parties, but in brief: • Through a friend of his, Mr W joined a WhatsApp group of investors acting on stock tips from individuals who identified themselves as being legitimate financial analysts. • Mr W proceeded to open a trading account with Robinhood and began acquiring shares in a company listed on the NASDAQ I’ll refer to as “O”. • Not long after acquiring his stake in O, its price collapsed entirely losing nearly all of its value in a single day. • Mr W subsequently realised he’d been the victim of a market manipulation scam, more commonly known as a “pump and dump” scam. • He complained to Robinhood that as the victim of a scam he was owed reimbursement, and that in any case the firm should’ve acted to protect his money. • Robinhood didn’t uphold Mr W’s complaint and as he remained unhappy, he referred the matter to our service. Our investigator considered Mr W’s complaint but didn’t uphold it. In summary they found: • Mr W had unambiguously accepted he was responsible for all trades made on his account, and Robinhood had no obligation in this context to advise on or second guess his instructions. • They weren’t persuaded Robinhood could’ve had any reasonable basis to interfere with Mr W’s trading activities based on what it could’ve reasonably known about O and how it was being traded. • There are circumstances where firms are expected to reimburse customers who’ve been the victims of scams. However the rules which underpin these expectations don’t apply to Robinhood or the circumstances of Mr W’s complaint. • Broadly, Robinhood adequately warned Mr W through its various disclosures that trading on financial markets involved risk, and that he was responsible for the decision to trade O, and regrettably therefore, the consequences of that decision. • On balance, the Investigator wasn’t persuaded there was any fair or reasonable basis upon which Robinhood could be expected to reimburse Mr W for his losses and they declined to award him any compensation. Mr O didn’t accept our Investigator’s findings so the matter’s been referred to me for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

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reasonable in the circumstances of this complaint. Having done so I’ve reached the same conclusion as our investigator for largely the same reasons. I say this because: • I’ve studied Robinhood’s terms carefully, and I’m satisfied they make it clear Mr W’s capital is at risk whilst trading on its platform, and that he’s responsible for all trades made on his account. From reading these terms, I don’t think there could’ve been any reasonable expectation that Robinhood would proactively monitor Mr W’s trades to manage the level of risk he was taking. • Mr W has identified himself as a novice investor. But the rules don’t preclude Robinhood from offering its stockbroking services to new investors, and there was no requirement for the firm to have assessed his level of knowledge or experience prior to allowing him to trade O. • I’m not persuaded there was a point in time where Robinhood should’ve acted on Mr W’s behalf to proactively prevent the loss he’s sustained whilst trading O. He has my considerable sympathies, but it’s my opinion that what Mr W’s expected of Robinhood is far in excess of the level of service it agreed to provide in its terms and conditions. • In specific circumstances, some firms are obligated to reimburse customers who’ve been the victims of a scam. But like our Investigator, I’m satisfied that in these specific circumstances, there’s no automatic requirement for Robinhood to reimburse Mr W’s losses. • Broadly speaking, I’ve found Robinhood treated Mr W fairly and as I would expect it to when opening his account, facilitating his trading instructions, and acting as his nominee. And in the aftermath of the scam, the firm’s responded fairly and in good time when Mr W raised his concerns. For all of the reasons listed above, I do not uphold Mr W’s complaint about Robinhood. My final decision My final decision is that I do not uphold Mr W’s complaint about Robinhood U.K. Ltd. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 22 May 2026. Marcus Moore Ombudsman

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