Robinhood Hacking Victim Sues Trading Platform Over Security

(Bloomberg) -- A California man sued Robinhood Markets Inc. after his account was hacked, claiming the trading platform aimed at millennials didn’t do enough to protect customers’ sensitive information.

Siddharth Mehta said in a complaint provided by his lawyer that his account was looted of “tens of thousands of dollars” in July. He’s seeking to represent all other hacking victims in the proposed class action lawsuit. The complaint wasn’t immediately available in public filings on Santa Clara County court’s web site.

Mehta is one of almost 2,000 Robinhood users whose accounts were compromised by cyber criminals last year, according to an internal review at the company in October 2020.

“Robinhood’s customers collectively lost millions of dollars,” Mehta said in the complaint. “Robinhood neglected to inform customers of the unauthorized activity for months. Only after reports were leaked by anonymous sources to news outlets did Robinhood disclose that a widespread breach had occurred.”

Mehta didn’t immediately notice his account had been broken into, according to the complaint. His lawyer, Kevin Osborne, partner at Erickson Kramer Osborne, said Mehta wasn’t refunded the money he lost.

“Robinhood behaved like it was just a tech start up -- running fast, breaking stuff, and growing faster than its systems could handle,” Osborne said in an emailed statement. “But it’s not just a start up, its a financial institution and it has real responsibilities. They’re handling people’s savings.”

Robinhood declined to comment on the lawsuit.

The online brokerage that allows users to buy fractions of shares to make trading more affordable exploded in popularity last year, adding millions of users.

The case is Mehta v. Robinhood Financial LLC, Superior Court of the State of California, County of Santa Clara.