Robinhood to pay $45M SEC settlement over data breach, other violations(www.wsj.com)
94 pointsby chollida14 days ago6 comments
  • chollida14 days 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.

  • Forbo4 days ago
    And their stock is up 5%.

    Glad we do so much to keep corporations accountable in this country!

    • c-linkage4 days 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.
      • tmpz223 days 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.

        • Dalewyn3 days 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.

          • soulofmischief3 days 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.

        • polartx3 days ago
          Melodramatic much?
    • Lionga4 days 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.

    • Bhilai3 days 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.
    • gruez4 days ago
      ...or that it was already priced in?
  • blackeyeblitzar3 days 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.
    • cheeseomlit3 days 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
    • mrguyorama3 days 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.
  • typeofhuman4 days ago
    That money should go to impacted individuals.