Gangti Zhu, a retiree from Maryland, says he put almost all of his money into his Robinhood Markets account, only to end up losing about $300,000 due to a hack.
He describes the same painful experience that other users faced: a panicked search for a phone number, a series of emails after finding out there was no emergency line, and then relief when the money was finally returned to his account.
The main difference, he says, is that Robinhood took back the money that had been deposited into his account.
“Our team has completed its investigation and determined that your account has not been compromised and that no unauthorized activity on your account,” the Dec. 4 email from a customer support representative named Greg P. said. “As a result of our findings, we have removed the fixes Robinhood made.”
"I was in the dark, desperate, anxious and had no idea what had happened to account and what to do next," said Zhu, 63.
His case is an extreme example of a Robinhood account hacking claim. All of this comes at a time when the brokerage is facing increasing complaints along with claims of compromised accounts.
An internal investigation this year found that hackers had hit about 2,000 accounts, Bloomberg reported in October, while dark web ads suggested that many more accounts could be at risk. More recently, Robinhood found that “fewer than 40” cases of accounts being compromised by malware.
The malware can allow hackers to take over your account and make it appear as if it came from a trusted device, making it harder to track down the fraud. Robinhood has taken steps for affected customers to help them resolve issue , said David Favreau, head of fraud at the company.
Zhu’s case is an unusual one. He had more than half a million dollars in account — a much larger amount than the typical Robinhood user — and he says the hackers made off with about $300,000 through options trading, which can be harder to identify as fraudulent than a simple withdrawal of funds. He has filed complaints with the SEC and the Financial Industry Regulatory Authority.
Robinhood, which has more than 13 million users, has promised to reimburse customers if it finds they lost money due to unauthorized activity. The company said it has referred Zhu's case to law enforcement.
Information source: bloomberg.com
