National investment loss lawyers KlaymanToskes reports that in recent weeks, many investors have found themselves locked out of their brokerage accounts, during one of the most significant market downturns of the year. This alarming trend highlights the vulnerabilities in the technology infrastructure of major retail brokerage firms such as Charles Schwab, Vanguard, and Fidelity. As market volatility surged, these platforms experienced widespread outages, preventing investors from accessing their accounts and making timely trading decisions.
The primary cause of these outages appears to be elevated trading volumes overwhelming brokerage systems. Vanguard CEO Salim Ramji noted that the industry-wide slowness was attributed to these higher volumes. Schwab cited a combination of extreme market volatility and a technical issue with a vendor as contributing factors.
For many customers, the inability to access accounts during market sell offs is more than simply an inconvenience, it is a missed opportunity to capitalize on lower stock prices. This sentiment is echoed by countless individual investors who found themselves powerless as the Dow Jones Industrial Average plummeted by 1,000 points, with the S&P 500 and Nasdaq Composite each shedding about 3%.
These disruptions are not isolated incidents. During the COVID-19 pandemic, similar outages plagued the industry as retail investors flocked to the market, driven by the adoption of zero-commission trading. Despite this recurring problem, many wonder if enough has been done to regulate and improve trading platforms.
While stock exchanges and major off-exchange trading platforms are required to adhere to strict regulations governing system integrity—a rule established by the Securities and Exchange Commission (“SEC”) after the May 2010 “flash crash”—retail brokerages do not face the same level of scrutiny. This regulatory gap leaves retail investors exposed to potential risks during periods of high market activity.
Investors should know that regulatory bodies like the Financial Industry Regulatory Authority (“FINRA”) have the ability to penalize brokerage firms for severe outages. For example, in 2021, Robinhood paid nearly $70 million to settle allegations related to technical glitches.
If you have experienced financial losses due to operational outages, consulting with experienced investment loss attorneys, such as those at KlaymanToskes, can provide clarity on your rights and recovery options. Our firm has assisted investors who have sustained damages due to investing platforms’ operational outages and investors’ inability to trade at a substantial profit.
KlaymanToskes has helped recover over $600 million (exclusive of attorneys fees and costs) for investors, and can help you determine if your loss is due to operational failures, fraud, unsuitable investment advice, and/or other securities violations.
Contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your recovery options.
About KlaymanToskes
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
investigations@klaymantoskes.com
www.klaymantoskes.com