Robinhood crippled by trading outage two days after data breach

abdelaziz Fathi

Clients of Robinhood are reporting problems using its trading terminals, which prevented some of them from trading as the US markets were opening.

Several users were complaining about problems logging into or using the broker’s platforms on Thursday, and complaints about reaching help phone lines also began to climb in the afternoon.

The no-fee app confirmed earlier that some clients were experiencing difficulty accessing their accounts on their site. They stated it was investigating and working to resolve the issue as soon as possible.

Robinhood tweeted that it had resolved the issue around midday. The brokerage made this announcement to its customers at approximately 04:25 GMT.

Robinhood then said the technical problems with the systems were resolved, and the service was restored to customers on a staggered basis, which is a normal procedure following an outage, a tweet from the firm’s Twitter account said around 6:35 pm.

According to Downdetector app, which offers real-time status and uptime monitoring for over 3,000 services, Robinhood users are not experiencing connection problems that involved the server connection.

Almost all major US brokers had difficulty just keeping their service online during the financial turmoil largely driven by coronavirus concerns. They often blamed the crashes on a steer trading volume and new account sign-ups, promising to improve their infrastructure and investing in additional redundancies.

As the time of writing, no other platforms reported issues though some of them were part of a similar multi-system market outage that affected the US major platforms earlier this year due to higher-than-usual trading volumes. Instead, some discount brokers bragged that its systems remained operational this morning, despite high traffic.

While online brokers routinely experience brief outages, it had not been common for several of them to happen simultaneously.

A fair number of Robinhood users were frustrated with trying to figure out how they had fared many times throughout last year. At the time, clients complained about not having access to their accounts and enduring long waiting times for customer service.

Robinhood’s CEO blamed the shutdown on volatile market conditions, record trading volume, and record new account requests, which caused stress on the company’s infrastructure.

Robinhood, which was just hit by a security breach that has exposed personal data of more than seven million people, was already the subject of an investigation by the SEC and FINRA regulators into its handling of outages on its platforms.

The probes were also extended to brokerage accounts that were compromised by an attack that gave hackers the ability to take over users’ trades and funds in 2020.

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