Robinhood Faces Class Action Alleging Negligence and Security Failures Over Data Breach

Robinhood, a prominent financial services platform, faces a class action lawsuit, Tyrone Hammonds v. Robinhood Markets Inc. The suit alleges negligence after a data breach by the BASHE ransomware group.

Jessy Edwards reports in Top Class Actions that the plaintiff filed the lawsuit in California federal court, citing violations of consumer protection laws. Allegedly, the breach exposed sensitive customer data, including Social Security numbers, and resulted in severe financial and emotional harm to affected users.

The complaint claims the breach occurred after BASHE accessed Robinhood’s systems and stole millions of records. When Robinhood refused to meet the group’s ransom demand by October 17, 2024, the stolen data was leaked to the dark web.

The lawsuit contends Robinhood’s cybersecurity inadequacies made the breach possible, betraying customer trust. Plaintiffs claim ongoing risks include fraudulent tax filings, unauthorized loans, and identity theft.

Affected users reportedly suffered privacy invasion, identity theft, and financial loss. Additionally, the lawsuit alleges Robinhood failed to implement robust cybersecurity measures and did not promptly inform customers about the breach, intensifying the potential harm.

The legal action also criticizes Robinhood for delayed and insufficient breach notifications, leaving users vulnerable. It seeks to represent all US customers impacted by the breach and demands damages, legal fees, and an order compelling Robinhood to enhance its data security practices.

Timely breach notifications are crucial for client-facing financial service platforms. Legal teams should monitor this case closely for implications under consumer protection laws, including the Federal Trade Commission Act and the Gramm-Leach-Bliley Act.