The losses were in FITBIT Options. How would the hackers benefit from that MORE than transferring out the dollars directly? Seems like the person lost, and was claiming it was stolen. Would that be wire fraud?
Easy. You get in someone's account and find some high spread thinly traded options... and you take the other end of the trade be it puts or calls. Was it Fitbit? I didn't read all the details but I thought Google bought them. If that deal is still on, then the stock is going to be in a relative flatline until the deal closes. Perfect opportunity.
I think Bloomberg said it was Fitbit. Then if you are on the other side, then you got to get your money out which should not be to hard, given how slow this train wreck occurred.
the rookie Robinhood thought it could compete with those masters who have been in this business for years like Schwab, TD, Etrade, Morgan Stanley, GS, Merrill, IB,... from the SEC charge: "As the SEC’s order finds, one of Robinhood’s selling points to customers was that trading was “commission free,” but due in large part to its unusually high payment for order flow rates, Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices". "Despite this, according to the SEC’s order, Robinhood falsely claimed in a website FAQ between October 2018 and June 2019 that its execution quality matched or beat that of its competitors. The order finds that Robinhood provided inferior trade prices that in aggregate deprived customers of $34.1 million even after taking into account the savings from not paying a commission. Robinhood made these false and misleading statements during the time in which it was growing rapidly". https://www.sec.gov/news/press-release/2020-321
And here is an example of a guy who lost $100K, potentially because he was NOT using Robinhood: https://www.reddit.com/r/options/comments/kj5pa5/lost_100k_today_in_3_minutes/ He traded options using market orders, while Robinhood doesn’t allow market orders for options, thus protecting people from their own stupidity, at least to a degree.