Not upheld: share trading order execution and market volatility complaint against Robinhood U.K. Ltd

Decision detail

Summary

Mr Z purchased shares in a US-listed company and placed a stop limit order to protect against losses. When the share price fell rapidly by over 90% on 30 September 2025, his stop limit order was triggered but not executed because the price fell below the limit price. Nasdaq trading halts prevented immediate execution. Mr Z eventually sold at a much lower price, incurring approximately $7,000 in losses. The ombudsman found that Robinhood, operating an execution-only platform, was not responsible for the losses as they resulted from market volatility and the inherent mechanics of stop limit orders in volatile conditions, not any fault or misleading conduct by the firm.

The Ombudsman's reasoning

The ombudsman found that Mr Z had an execution-only account where he was responsible for his own trading decisions. The stop limit order functioned as designed - it was triggered when the stop price was reached but not executed because the price fell below the limit price during volatile trading. The trading halts were imposed by Nasdaq, beyond Robinhood's control. While the 90% price drop was extreme, such falls are possible for smaller companies. Mr Z was aware that stop limit orders are not guaranteed to execute in volatile conditions and that share investing carries significant risk. There was no evidence of any fault or misleading conduct by Robinhood.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website