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Robinhood Clients May Have Been Hacked; Customer Service Response Slammed

October 13, 2020

Several customers of zero-commission brokerage Robinhood say they saw money disappear from their accounts without recourse, according to news reports.

A company spokesperson told Reuters and Bloomberg on Friday that some Robinhood customers may have been targeted by hackers as a result of a compromised personal email address outside the firm’s platform. The spokesperson said the breach wasn’t on Robinhood’s systems, but that Robinhood was “actively working with those impacted to secure their accounts,” according to Reuters and Bloomberg.

Robinhood customers, meanwhile, tell Bloomberg there was little they could do when they found out their accounts may have been breached, as Robinhood’s app doesn’t have an emergency phone number. One customer says she alerted the brokerage about a possible theft when she learned that her position in 450 shares had been liquidated and that she had $10,000 worth of pending withdrawals, according to the news service. The response from Robinhood, via email, was that she would get a response within “a few weeks,” she says, according to Bloomberg.

The news service says it spoke to five customers in total who had similar experiences. Two of the customers tell Bloomberg that they don’t believe they fell prey to phishing scams or malware, and that none of the other accounts where they use the same email as for their Robinhood accounts have been affected.

At least four Robinhood customers say they’ve alerted the SEC and Finra, and two of the customers say they were contacted by the SEC for more information, according to the news service.

The SEC and Finra both declined comment to Bloomberg.

Robinhood made headlines several times this year. The platform suffered several outages in March, including on days of some of the biggest market moves. It’s now facing several lawsuits related to the outages as well as investigations by the SEC and Finra into how it handled them. 

In June, a 20-year old Robinhood customer took his own life after apparently seeing a negative $730,000 cash balance that may have been a temporary balance.

And in September, Robinhood became the target of an SEC investigation over the way it disclosed its methods for routing customers’ orders to high-speed trading firms. 

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By Alex Padalka
  • To read the Bloomberg article cited in this story, click here if you have a paid subscription.
  • To read the Reuters article cited in this story, click here.
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