Robinhood users had accounts looted. Risk of same thing happening to IB?

[IamTheCasino]

Robinhood wasn't hacked and your deposits aren't insured when your broker isn't hacked, but when someone obtains your password and logs in pretending to be you. Try proving then that the broker was at fault.

And when you have a class action lawsuit from millions of people (or a collective group that adds up to millions of dollars) wanting their money with an electronic forensic specialist saying how RH was negligent in some area (because they could have done a better job at preventing/doing "x"), then I bet that tune changes.

There is a way things are supposed to be done, what you and BMK are stating, and then there is a way of how it would play out in the real world. Often, what is written or "should be done" does not line up with the execution when the rubber meets the road.

 

[BMK]

IMO, if IB got hacked and was required to payback every single cent to all their customers I can almost guarantee they would be insolvent/declare bankruptcy.

And when bankruptcy is declared that marks them as a "financially troubled brokerage firm"

In which case, the FED would step in and work out some type of deal with them.

You make a good point, but you are assuming that the hack involves thousand or millions of customers, and millions of dollars. This Robinhood thing may only involve a couple hundred customers, and the damage may only be six figures.

As I said in my earlier post, Robinhood may well have some liability, because it appears that they were negligent and did not take reasonable steps to prevent unauthorized transfers. But most of the transfers will probably be reversed by the banks.

BMK

 

[IamTheCasino]

You make a good point, but you are assuming that the hack involves thousand or millions of customers, and millions of dollars. This Robinhood thing may only involve a couple hundred customers, and the damage may only be six figures.

As I said in my earlier post, Robinhood may well have some liability, because it appears that they were negligent and did not take reasonable steps to prevent unauthorized transfers. But most of the transfers will probably be reversed by the banks.

BMK

See previous post about negligence.

Most hackers go for the balls and wont stop until they have to. Most. This shit happened all the time with BTC exchanges.

 

[Gaslight Capital]

Robinhood allows (or allowed) users to transfer funds to a bank account that had never before been linked to the brokerage account, without first verifying that the bank account belonged to the brokerage accountholder.

Well, that is not a best practice by any means.

 

[HobbyTrading]

I'm a satisfied customer of IB. So far, I'm happy with the security aspects of IB platform. What happened to Robinhood users scare me. Has similar things happen to IB customers before? What's the risk of same thing happening to IB customers? What precautions should we take to minimise this risk?

https://www.bloomberg.com/news/arti...ad-accounts-looted-say-there-s-no-one-to-call

The article mentions that Robinhood allowed money transfers to third persons. IB does not allow this: the bank account where you transfer money to has to be be in your name.

 

[Overnight]

The article mentions that Robinhood allowed money transfers to third persons./.

Really? Wow, talk about a failure to communicate common sense. How old are the founders of Robinhood? 25ish?

 

[BMK]

Let's see how long it takes for the hacking affair to become part of the Robinhood Wikipedia article...

As of 10:20 PM eastern time on October 9, there is no mention of it.

https://en.wikipedia.org/wiki/Robinhood_(company)

 

[Overnight]

Let's see how long it takes for the hacking affair to become part of the Robinhood Wikipedia article...

As of 10:20 PM eastern time on October 9, there is no mention of it.

https://en.wikipedia.org/wiki/Robinhood_(company)

You can just become a wiki contributor, and start adding to it! No need for a delay.

 

[Cdntrader]

I'm a satisfied customer of IB. So far, I'm happy with the security aspects of IB platform. What happened to Robinhood users scare me. Has similar things happen to IB customers before? What's the risk of same thing happening to IB customers? What precautions should we take to minimise this risk?

https://www.bloomberg.com/news/arti...ad-accounts-looted-say-there-s-no-one-to-call

Robinhood is a joke.

"
It took Soraya Bagheri a day to learn that 450 shares of Moderna Inc. had been liquidated in her Robinhood account and that $10,000 in withdrawals were pending. But after alerting the online brokerage to what she believed was a theft in progress, she received a frustrating email.



The firm wrote it would investigate and respond within “a few weeks.” Now her money is gone."

 

[HobbyTrading]

Really? Wow, talk about a failure to communicate common sense. How old are the founders of Robinhood? 25ish?

Partial quote from the article:

They also said Robinhood’s online portal showed their money went to a recipient at Revolut, another popular financial-technology startup. London-based Revolut, which offers a money transfer and exchange app, expanded to the U.S. this year.

“Revolut has been made aware of the issue and is investigating urgently,” a company spokesman said Friday in an email.

Bill Hurley, who owns a metal-fabrication shop in Windsor, Connecticut, said he received notifications that stock and Bitcoin had been sold from his account on Sept. 21, and that $5,000 was transferred to Revolut accounts in two transactions. He said he emailed Robinhood for assistance while the transactions were pending but received none.