Apr 30, 2026
When your trading platform goes dark during a market sell-off, the fine print will almost always favour the platform. But there are ways for Canadian investors to protect themselves — and potentially recover losses — but only if you move fast and document everything.
For investors caught in the August 5, 2024, U.S. market sell-off — a sharp drop in the market due to concerns over the U.S. economy — this is welcome, if late, news. When the 2024 sell-off occurred, thousands of investors using major U.S. brokerages, like Fidelity, suddenly found themselves locked out of their accounts or unable to place trades (1). The disruptions were tied to a surge in trading activity, with widespread reports of login failures and execution issues across multiple platforms.
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However, this wasn't the first time. Similar outages occurred in the U.S. and Canada, including during the March 2020 COVID crash, as well as other high-stress market periods.
These events serve as a stark reminder that even the largest, most established trading platforms can struggle under pressure, which raises an important question for Canadians. When similar outages happen here, what options do investors actually have?
The hard truth is that there is limited legal recourse. But 'limited' doesn't mean 'none,' and that distinction matters.
What happens when your app crashes during a trade
A trading outage during a volatile market isn't just frustrating; it can cost you real money. If you were trying to sell during a decline, buy into a dip or trigger a stop-loss, an outage can create a measurable loss.
Imagine trying to sell during a sharp morning drop, getting an error message and then watching the position fall another 8% before the platform comes back online. That gap can hurt. Whether the loss is recoverable depends on what you can prove and how quickly you act.
You can always share your frustrations on social media, but it's unlikely to help your case. You'll need documentation to file a formal complaint.
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What investment app terms actually say about outages
Canadian trading platforms are regulated by the Canadian Investment Regulatory Organization (CIRO) (2), but the rules for outages are mostly governed by their user agreements. They are painstakingly written to mostly limit or exclude liability for losses caused by service interruptions, system failures, or high-volume traffic. In other words, if the app crashes during a busy trading session, the platform has likely already protected itself from being held responsible. But regulation still matters.
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CIRO sets conduct standards for its members, including how they handle complaints, and those obligations exist outside of the contract you agreed to. That's where the complaint process comes in.
OBSI: How to use Canada's investment ombudsman
The Ombudsman for Banking Services and Investments (OBSI) is a not-for-profit organization that investigates complaints against participating financial firms. It's the main path for disgruntled investors — it is independent, free to use and designed specifically for situations like this.
In 2023, OBSI opened 662 investment cases (3). This was up sharply from 465 the year before, as market volatility and rising rates generated more disputes between investors and their firms.
When OBSI finds in favour of an investor, it can recommend compensation of up to $350,000 per complaint. But there's a catch. OBSI's recommendations are not legally binding. Firms are expected to comply, and most do, but not all outcomes match the full recommended amount. For example, between 2019 and 2023, 33 investment cases were settled for $1.1 million less than OBSI's total recommendation (4).
The complaint process itself is structured. Before you can file with OBSI, you must go through the investment firm's internal complaint process. That means submitting a formal written complaint and waiting for a response.
If you receive a response and are still not happy, or if 90 days have passed without one, you have 180 days to escalate your case to OBSI.
How to document a loss OBSI can actually evaluate
OBSI offers a guide to help investors understand what to expect when they escalate a complaint (5).
Generally speaking, to have any chance of compensation, OBSI will want to see evidence that you tried to execute a trade during the outage, based on screenshots of error messages, timestamps, or your account's order history.
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You should also document your attempts to execute the trade through alternative channels during the outage, such as on the platform's telephone trading line. And you'll want to provide a clear calculation of the difference between the price at the time of your attempted trade and the price when the platform was back online.
During periods of extreme volatility, where intraday swings are frequent and sharp, that price gap could be substantial. Collecting this evidence immediately can make a difference in the outcome.
Which platforms have the strongest accountability record?
There's no public leaderboard for platform reliability, but there are signals you can use.
CIRO maintains a public database of registered firms and a record of regulatory and disciplinary actions (6). While uptime statistics are not publicly disclosed by most platforms, CIRO's complaint and enforcement records can offer a baseline for evaluating a firm's conduct history before opening an account.
Ultimately, before you choose a self-directed investing account, it's worth checking whether the firm has a transparent record of past disruptions and how it communicated with clients during them.
The bottom line
Trading app outages during volatile markets are fairly common. The platforms and regulators know it. What separates investors who are able to recover some of their losses from those who don't is almost always documentation and process.
If you experience a loss during a platform outage, act fast, as the 180-day window from OBSI closes quickly. If you haven't experienced an outage yet, it may be time to set up a backup trading option, such as a secondary brokerage or a phone trading channel, and become familiar with your platform's complaint process before the next selloff, not during it.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CTV News (1); Canadian Investment Regulatory Organization (2, 6); Ombudsman for Banking Services and Investments (3, 5); Wealth Professional (4)
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Colin Graves is a Winnipeg-based financial writer and editor whose work has been featured in publications such as Time, MoneySense, MapleMoney, Retire Happy, The College Investor, and more. Before becoming a full-time writer, Colin was a bank manager for over 15 years.
