Robinhood announced today that they were experiencing service disruptions in their web app. A very similar situation took place on Monday, the 31st of August, 2020 (yesterday), as two of the most popular stocks in the world issued stock splits. Both Tesla and Apple split their stocks over the past few days, and both stocks have appeared to rise as fast as they did before said split – or faster.
The service disruption occurred as Robinhood faced an SEC probe over a service outage in March. Both the Securities and Exchange Commission (SEC) and the Financial Regulatory Authority (FINRA) were reported by Bloomberg News to be investigating Robinhood Markets for the outage. The same source suggested that one of the investigation’s focuses was “robinhood’s lack of customer response.”
Robinhood alternatives E*Trade, Schwab, Fidelity, and Interactive Brokers received less than half of the complaints received by the FTC since the beginning of the year 2020 through mid-July. This is according to FTC records obtained via public information request by Bloomberg.
Robinhood hired former Republican SEC commissioner Dan Gallagher as legal representation in May of 2020 to “tamp down the furor” of the SEC/FINRA investigation. In July of 2020, Gallagher in turn hired “another SEC insider” ex-Clayton Chief of Staff Lucas Moskowitz to work for Robinhood as well. Moskowitz now runs Robinhood’s regulatory, litigation, and lobbying efforts.
UPDATE: Robinhood announced “all systems operational.” Cross your fingers it lasts long enough to beat the morning rush tomorrow.