California Man Sues Robinhood Over Last Year's Hacking Of Customer Accounts, Seeks Class-Action Status

Robinhood has been sued by a man over last year's hack into the stock trading platform. 

What Happened: Bloomberg reports that a man in California has sued the app-based trading platform in a proposed class-action suit. This is after Robinhood was hacked last year.

Some 2,000 accounts were hacked. The plaintiff, Siddharth Mehta, says he lost tens of thousands of dollars from his account as a result of the attack. He claims Robinhood did not do enough to protect customer accounts and that the company did not inform him of the intrusion until months later, after it came out in media reports.

“Robinhood’s customers collectively lost millions of dollars,” Bloomberg quotes Mehta as saying in the complaint.

Why It Matters: Robinhood was among several key factors in the 2020 bull market that defied headlines that in most years would tank the market. The pioneer of no-commission trading ushered in a new generation of traders who leapt into the markets last year with gusto amid the downtime — and governent stimulus money — of the pandemic.

Established trading platforms such as Fidelity, ETrade, Charles Schwab Corporation SCHW and TD Ameritrade followed its lead by offering no-commission trading. 

The company is likely to go public this year.