4 ms·

Robinhood to pay $45M SEC settlement over data breach, other violations

94 points by chollida1 2y ago

ChrisArchitect 2y ago
Official release: https://www.sec.gov/newsroom/press-releases/2025-5 https://www.sec.gov/newsroom/press-releases/2025-5 (https://news.ycombinator.com/item?id=42689897 https://news.ycombinator.com/item?id=42689897)
typeofhuman 2y ago
That money should go to impacted individuals.
chollida1 2y ago
A few notes from analyst research on this. Robinhood got off pretty easily here, looks like a settlement was rushed so it wouldn't pass onto the next administration. > The messaging apps probe appears to have settled for $8 million, well below the $100 million we anticipated based on a $104 million accrual in 3Q23 > Fines connected to a 2021 data breach came in at $2 million, consistent with our view they'd be below $10 million. They have a few other lawsuits on the go at the moment. One is a class action lawsuit over them taking higher Payment for order flow that lowered the execution quality that their clients got. Bloomberg is estimating this as 70% likely to be settled in Robinhoods favour The other is their cash sweep lawsuit where they are accused of paying unreasonably low rates on their cash sweep products. Here they are not alone as many of their peers are also being sued for the same issue. Schwab, for instance, settled with the SEC for $187M for this in 2022.
Forbo 2y ago
And their stock is up 5%. Glad we do so much to keep corporations accountable in this country!
- c-linkage 2y ago
  The stock market measures how people feel about a company. The fact that the case is resolved has relieved a lot of anxiety which is enough to drive the stock up.
  - tmpz22 2y ago
    The stock market is a bull tied vertically with enough bondage equipment to make the director of 50 Shades of Grey puke. Pumped full of every chemical invented and in a glass case on full display for all to see. It is not a measure of how people feel.
    - Dalewyn 2y ago
      People want stonks to go up up up. Company settled lawsuit, which means it probably won't go down down down meaning its stocks went up up up. Stonks are about how people feel. The only question is whether "people" mean individual investors or fund investors.
      - soulofmischief 2y ago
        Stocks are about expectations, not about how people feel. Big money generally doesn't invest in securities that they simply want to go up. They invest in securities which they expect to go up, or bet against securities they expect to go down. They specifically do not rely on how they feel—they rely on analysis. Furthermore, a good fund will make money whether the market is going up or down, often aiming for stable returns over consistently positive alphas. There are definitely some fractal feedback loops regarding expectations, sentiment and price changes, but generally speaking you're looking at projections of future value when supply or demand changes. If a rational investor thinks their portfolio is going to tank because of some event, they're going to sell off some or all of the affected securities, regardless of their desire for the security to continue rising in price.
    - polartx 2y ago
      Melodramatic much?
- gruez 2y ago
  ...or that it was already priced in?
- Lionga 2y ago
  This is basically a "get out of jail free" card for lifetime for a tiny fraction of the profit it made them. So the hush money the SEC wanted is lower then expected, and price of stock should go up.
- Bhilai 2y ago
  Security breaches have generally had no impact on stock price of corporations. At best, some security leader will get axed and nothing will change.
blackeyeblitzar 2y ago
What is going to be done about the insanely damaging databreach at change healthcare, a subsidiary of the United healthcare group? Over 100 million Americans had their medical details leaked.
- cheeseomlit 2y ago
  Nothing will be done, at best we'll get a $10 gift card to applebees for our trouble- the Luigi maneuver is the only possible recourse. It's crazy how little this breach is talked about, I was seeing red when I got that letter
- mrguyorama 2y ago
  We had a choice to pick a government that could do something to regulate the industry and instead we chose grifters, losers, and incompetent fools.
neonate 2y ago
https://archive.ph/H9YEe https://archive.ph/H9YEe

94 points by chollida1 2y ago

Official release: https://www.sec.gov/newsroom/press-releases/2025-5 https://www.sec.gov/newsroom/press-releases/2025-5 (https://news.ycombinator.com/item?id=42689897 https://news.ycombinator.com/item?id=42689897)

typeofhuman 2y ago

That money should go to impacted individuals.

chollida1 2y ago

A few notes from analyst research on this. Robinhood got off pretty easily here, looks like a settlement was rushed so it wouldn't pass onto the next administration. > The messaging apps probe appears to have settled for $8 million, well below the $100 million we anticipated based on a $104 million accrual in 3Q23 > Fines connected to a 2021 data breach came in at $2 million, consistent with our view they'd be below $10 million. They have a few other lawsuits on the go at the moment. One is a class action lawsuit over them taking higher Payment for order flow that lowered the execution quality that their clients got. Bloomberg is estimating this as 70% likely to be settled in Robinhoods favour The other is their cash sweep lawsuit where they are accused of paying unreasonably low rates on their cash sweep products. Here they are not alone as many of their peers are also being sued for the same issue. Schwab, for instance, settled with the SEC for $187M for this in 2022.

Forbo 2y ago

And their stock is up 5%. Glad we do so much to keep corporations accountable in this country!

c-linkage 2y ago
The stock market measures how people feel about a company. The fact that the case is resolved has relieved a lot of anxiety which is enough to drive the stock up.
- tmpz22 2y ago
  The stock market is a bull tied vertically with enough bondage equipment to make the director of 50 Shades of Grey puke. Pumped full of every chemical invented and in a glass case on full display for all to see. It is not a measure of how people feel.
  - Dalewyn 2y ago
    People want stonks to go up up up. Company settled lawsuit, which means it probably won't go down down down meaning its stocks went up up up. Stonks are about how people feel. The only question is whether "people" mean individual investors or fund investors.
    - soulofmischief 2y ago
      Stocks are about expectations, not about how people feel. Big money generally doesn't invest in securities that they simply want to go up. They invest in securities which they expect to go up, or bet against securities they expect to go down. They specifically do not rely on how they feel—they rely on analysis. Furthermore, a good fund will make money whether the market is going up or down, often aiming for stable returns over consistently positive alphas. There are definitely some fractal feedback loops regarding expectations, sentiment and price changes, but generally speaking you're looking at projections of future value when supply or demand changes. If a rational investor thinks their portfolio is going to tank because of some event, they're going to sell off some or all of the affected securities, regardless of their desire for the security to continue rising in price.
  - polartx 2y ago
    Melodramatic much?
gruez 2y ago
...or that it was already priced in?
Lionga 2y ago
This is basically a "get out of jail free" card for lifetime for a tiny fraction of the profit it made them. So the hush money the SEC wanted is lower then expected, and price of stock should go up.
Bhilai 2y ago
Security breaches have generally had no impact on stock price of corporations. At best, some security leader will get axed and nothing will change.

blackeyeblitzar 2y ago

What is going to be done about the insanely damaging databreach at change healthcare, a subsidiary of the United healthcare group? Over 100 million Americans had their medical details leaked.

cheeseomlit 2y ago
Nothing will be done, at best we'll get a $10 gift card to applebees for our trouble- the Luigi maneuver is the only possible recourse. It's crazy how little this breach is talked about, I was seeing red when I got that letter
mrguyorama 2y ago
We had a choice to pick a government that could do something to regulate the industry and instead we chose grifters, losers, and incompetent fools.

neonate 2y ago

https://archive.ph/H9YEe https://archive.ph/H9YEe