Robinhood Class Action: Data Breach Exposed Customer Information

Case Overview: A class action lawsuit claims Robinhood failed to protect customer data, leading to a data breach that exposed sensitive information like Social Security numbers.

Consumers Affected: Robinhood customers whose personal information was compromised in the data breach.

Court: U.S. District Court for the Northern District of California

Robinhood Markets Inc., a financial services company widely known for its trading platform, is facing a class action lawsuit following allegations of a data breach that exposed sensitive customer information. The lawsuit accuses the company of negligence and failing to implement adequate cybersecurity measures to protect user data.

Filed in a California federal court by plaintiff Tyrone Hammonds, the complaint outlines claims that a ransomware gang known as BASHE accessed Robinhood’s systems, stealing millions of customer records, including Social Security numbers. According to the lawsuit, the group demanded a ransom by October 17, 2024, threatening to release the data on the dark web if the payment was not made.

Robinhood Customer Alleges Data Breach Exposed Sensitive Information

The complaint alleges that Robinhood refused to comply with the ransom demand, resulting in BASHE publishing the compromised data online. Hammonds claims the exposed information has been used for fraudulent activities, including identity theft, unauthorized loans, and tax filing scams. The lawsuit also states that Robinhood delayed notifying affected customers about the breach, leaving them vulnerable to ongoing risks.

As a user of Robinhood, Hammonds contends that the company failed to safeguard the personally identifiable information (PII) of its customers. The complaint seeks to represent all individuals in the United States impacted by the data breach.

Lawsuit Accuses Robinhood of Negligence and Cybersecurity Failures

The lawsuit identifies significant lapses in cybersecurity, asserting that Robinhood failed to meet federal and industry standards for data protection. Plaintiffs argue that proper encryption and safeguards could have prevented the breach.

Robinhood, founded in 2013 and based in Menlo Park, California, facilitates electronic trading of stocks, cryptocurrencies, and exchange-traded funds. As a financial services provider handling sensitive data, the lawsuit contends that the company had a heightened responsibility to protect its systems from cyberattacks.

Robinhood has denied the allegations, asserting that the October cyberattack described in the complaint did not occur. The company claims the plaintiffs are referencing a separate data security incident that took place in 2021, for which Robinhood settled a lawsuit in 2022 by agreeing to pay $20 million.

Other Companies Face Lawsuits Over Data Breaches

Robinhood is not the only company facing scrutiny over data breaches. In October, David’s Bridal was sued following two breaches that compromised sensitive information earlier this year. Filed in a Pennsylvania federal court, the lawsuit accuses the retailer of failing to protect customer data and promptly inform individuals of the breaches.

Similarly, Wells Fargo is dealing with allegations related to a July breach that exposed Social Security numbers and banking information. Plaintiffs claim the financial institution lacked adequate security protocols, resulting in harm to its customers.

In the Robinhood data breach class action lawsuit, Hammonds is requesting certification of the class. He is seeking $5 million in damages, along with reimbursement for costs associated with mitigating identity theft risks and a court order requiring Robinhood to improve its cybersecurity practices.

Case Details

• Lawsuit: Tyrone Hammonds v. Robinhood Markets Inc.
• Case Number: 3:24-cv-08321
• Court: U.S. District Court for the Northern District of California

Plaintiffs' Attorneys

• John J. Nelson (Milberg Coleman Bryson Phillips Grossman PLLC)
• Jeff Ostrow (Kopelowitz Ostrow P.A.)

Are you a Robinhood customer who was affected by the data breach? Share your experience in the comments below.