© 2025 CoolTechZone - Latest tech news,
product reviews, and analyses.

Robinhood settles data breach and other violations for $45M


American investment app Robinhood has agreed to pay $45 million to the Securities and Exchange Commission (SEC) to settle a data breach and other competition violations.

In 2023, the SEC launched an investigation into Robinhood’s activities. According to the securities and exchange supervisor, Robinhood had not implemented adequate safeguards to protect customers against identity theft between April 2019 and July 2022.

Additionally, the investment app failed to promptly investigate suspicious financial transactions from January 2020 to March 2022, leading to delays in filing suspicious activity reports.

In July 2021, Robinhood had to deal with a data breach. Hackers managed to gain access to the company’s servers and exfiltrated personal information of approximately seven million customers.

Furthermore, the company had trouble maintaining and preserving electronic communications with its brokerage customers between 2020 and 2021. It also failed to maintain copies of core operational databases in such a way that they were protected from deletion or modification.

Moreover, from May 2019 to December 2023, Robinhood Securities -one of the broker-dealers’ firms- did not comply with specific securities trading regulations related to short sales and fractional share trading. Lastly, the company failed to provide complete and accurate securities trading information to the SEC.

“Today’s order finds that two Robinhood firms failed to observe a broad array of significant regulatory requirements, including failing to accurately report trading activity, comply with short sale rules, submit timely suspicious activity reports, maintain books and records, and safeguard customer information,” Acting Director of the SEC’s Division of Enforcement Sanjay Wadhwa said in a statement.

Robinhood has agreed to pay $45 million to settle all violations from their brokerage operations with the SEC.

“It is essential to the Commission’s broader efforts to protect investors and promote the integrity and fairness of our markets that broker-dealers satisfy their legal obligations when carrying out their various market functions,” Wadhwa adds.


Leave a Reply

Your email address will not be published. Required fields are marked