[HN Gopher] Robinhood to pay $45M SEC settlement over data breac...
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       Robinhood to pay $45M SEC settlement over data breach, other
       violations
        
       Author : chollida1
       Score  : 86 points
       Date   : 2025-01-14 12:02 UTC (10 hours ago)
        
 (HTM) web link (www.wsj.com)
 (TXT) w3m dump (www.wsj.com)
        
       | ChrisArchitect wrote:
       | Official release:
       | 
       | https://www.sec.gov/newsroom/press-releases/2025-5
       | 
       | (https://news.ycombinator.com/item?id=42689897)
        
       | typeofhuman wrote:
       | That money should go to impacted individuals.
        
       | chollida1 wrote:
       | 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.
        
       | Forbo wrote:
       | And their stock is up 5%.
       | 
       | Glad we do so much to keep corporations accountable in this
       | country!
        
         | c-linkage wrote:
         | 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.
        
           | tmpz22 wrote:
           | 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.
        
             | Dalewyn wrote:
             | 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.
        
               | soulofmischief wrote:
               | 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.
        
             | polartx wrote:
             | Melodramatic much?
        
         | gruez wrote:
         | ...or that it was already priced in?
        
         | Lionga wrote:
         | 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.
        
         | Bhilai wrote:
         | Security breaches have generally had no impact on stock price
         | of corporations. At best, some security leader will get axed
         | and nothing will change.
        
       | blackeyeblitzar wrote:
       | 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.
        
         | cheeseomlit wrote:
         | 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
        
         | mrguyorama wrote:
         | 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.
        
       | neonate wrote:
       | https://archive.ph/H9YEe
        
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       (page generated 2025-01-14 23:01 UTC)