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Robinhood Crashes Amid Heavy Volume as Equity Markets Rally

By Lou Whiteman - Mar 2, 2020 at 12:01PM

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The online brokerage is having troubles at a delicate time for the company, and its customers.

U.S. equity markets jumped higher on Monday, but not all investors were able to buy into the rally. Customers of online brokerage Robinhood Markets Inc. reported issues accessing the site on Monday, taking to social media to express their frustration with the free trading app.

Robinhood said via Twitter it was experiencing downtime issues, saying "we are aware of the issue and are working to have all systems up and running as soon as we can."

Heavy volume crashes are not unique to small brokerages: Some of the largest online brokerages including Charles Schwab and Schwab acquisition target TD Ameritrade had issues last week as markets plunged. But the timing of the crash is inopportune for the privately traded company, which in the past few months has seen one of its primary competitive advantages disappear as more brokerages have begun to offer free stock trading.

A stock trading screen.

Image source: Getty Images.

Stock investors lashed out at Robinhood on social media, threatening to close their accounts or even sue the brokerage. While the litigation risk is small, the reputation risk for the start-up company is significant.

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