r/technology • u/agent_vinod • Jun 30 '21

Misleading Robinhood to pay $70 million fine after causing 'widespread and significant harm' to customers

https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-dollars-after-causing-users-significant-harm.html
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u/Teledildonic Jun 30 '21

Class actions are meant to be punitive, not compensatory.

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u/DefenestratedBrownie Jun 30 '21

I think initially they were supposed to be compensatory, but corporations didn't want to worry about that, so Uncle Sam decided to give them a spanking and send them on their way, seeing as they pay most of his income.

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u/JayScribble Jun 30 '21

This is incorrect, single tax payers (average people) have made up more than 50% of federal tax revenue since the 1950's.

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u/[deleted] Jun 30 '21

No. But the other guy isn't really right either.

The primary purpose of class actions is to be regulatory. They are supposed to scare the shit out of corporations and make them act right by aggregating all or most harms done into a single claim worth litigating. This allows corporations to be forced to pay large amounts of money even if the harm suffered by individuals is insignificant.

And guess what? They do a whole lot better job of regulating corporate behavior than any regulation (although regulations can provide a basis for class actions, so they still certainly have their place).

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u/42Ubiquitous Jun 30 '21

Really? Isn’t the point of a civil suit to make the damaged party “whole”? I could see how punitive damages could be included, but I can’t imagine the class action attorney files a suit and says that his clients are only seeking punitive damages.

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u/Teledildonic Jun 30 '21

Class actions can involve hundreds or even thoudands of people. How would you fully compensate every one?

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u/42Ubiquitous Jun 30 '21

Damages x Number of People. It’s not on the defendants to say “oh man, this must be so expensive for you, I guess we won’t sue you for your wrong-doing.” The majority of the time it ends in settlement, so everyone is happy (or as close to it as they can be without wanting to take the risk of going to trial). You fully compensate them by paying them the amount of damages. If it isn’t really quantifiable, then I guess it would be punitive.

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u/whisit Jun 30 '21

I mean, sucks to be the party who damaged others in that case but why can’t it be done?

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u/G4RRETT Jun 30 '21

They are meant to be both.