$20M Robinhood data breach settlement receives final approval

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Update:

• A California federal judge approved a nearly $20 million deal between a group of customers and Robinhood Financial LLC.
• U.S. District Judge Susan van Keulen issued an order that resolved two years of litigation from customers who claimed the trading platform failed to protect thousands of accounts from a data breach.
• The parties agreed to forego complex appeal processes and settle for $500,000 with class members receiving $260 each.
• Van Keulen wrote in her order that the claims administrator received 3,075 valid claims, and more than 400 class members chose to accept the two-year credit monitoring and theft protection offered in the settlement
• This settlement doesn’t cover claims from another data security incident Robinhood announced in January 2021 that is subject to separate pending litigation.

Robinhood hack class action lawsuit overview:

• Where: The class action lawsuit is pending in California federal court.
• Who: A California judge approved Robinhood customers’ class action claims against the trading platform.
• Why: The plaintiffs brought forward adequate evidence to support their claims of privacy violations in the wake of the 2020 Robinhood hack that compromised the accounts of 2,000 customers.

(Sept. 14, 2021)

The second draft of a class action lawsuit accusing online trading platform Robinhood of negligence after a 2020 hack has been approved by a California judge, who also provided the opportunity for further improvements to the plaintiff’s claims. 

The class action lawsuit, first filed earlier this year, claims that Robinhood violated privacy laws by failing to provide adequate security measures, resulting in a data breach affecting about 2,000 customers’ funds and personal information after a successful Robinhood hack in October of last year. 

Robinhood Hack Led to Losses

US Magistrate Judge Susan Van Keulen rejected Robinhood’s dispute against the class action lawsuit, declaring that the complaint adequately backs up its claims of negligence, unlawful privacy practices, unfulfilled reimbursement, and “noneconomic losses” such as loss of time and sensitive personal information. 

Judge Van Keulen still found some claims in the class action lawsuit lacking, but has given the plaintiffs another chance to elaborate on those claims that they “relied to their detriment” on Robinhood’s representations about its security measures and reimbursement policies. Plaintiffs do not need to “recall and specify precisely” which statements they relied upon, the judge maintains their case will be stronger with more specific evidence of which documents and statements Robinhood made when plaintiffs opened their accounts. 

Robinhood recently made another bid to dump a class action lawsuit, this one claiming restrictions imposed during January’s “meme stock” trading hysteria involving GameStop and other stocks of high volatility cost investors billions.  

Have you ever used Robinhood? Were you affected by the Robinhood hack last year? Tell us about your experience in the comments below!

The plaintiff is represented by Kevin Osborne, Julie Erickson, and Elizabeth Kramer of Erickson Kramer Osborne LLP. 

The Robinhood Data Breach Class Action Lawsuit is Siddharth Mehta v. Robinhood Financial LLC, Case No. 5:21-cv-01013-SVK, in the U.S. District Court for the Northern District of California. 

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