“We know this interruption was frustrating for our customers -- especially after last week and on a day that trading was halted,” the company said in the statement. “Our platform is now fully operational and we’re working hard to improve our service during these historic and volatile market conditions.”
The firm declined to comment further on what sparked Monday’s disruption.
Engineering Focus
Robinhood, founded in 2013 by Vlad Tenev and Baiju Bhatt, pioneered commission-free trading, a move that’s since been copied by larger online brokers including Charles Schwab Corp. The startup has attracted 10 million users and is now backed by venture capital firms including Index Ventures, Andreessen Horowitz and Sequoia, garnering a valuation of $7.6 billion.
The company has been increasingly focused on improving the reliability of its service in recent years, and in mid-2018 hired Adam Wolff from Facebook Inc. to lead its squad of engineers.
When Wolff joined, Robinhood’s entire engineering workforce was the size of the group of specialists he’d led at Facebook, he previously said. He has been focused on adding staff and last month hired former Facebook colleague Paul Tarjan.
“An area where we plan to focus is one we continue to invest in heavily as a company -- compliance,” Wolff said in a blog post announcing the hiring. “It’s fundamental to our focus on our customers and our ability to safely and confidently move forward as a firm.”
Shaken Confidence
Software mishaps have rocked Robinhood before. In late 2018, the company’s options trading service had an outage that locked consumers out of their accounts and stopped them from closing positions. Employees had to call affected clients to apologize, according to people familiar with the matter.
For its latest outages, Robinhood has created a dedicated customer service team to work directly with customers, the company said in a statement. The impact among customers “varies significantly due to the nature of our business,” it said.
The latest technology problems have drawn the attention of the Financial Industry Regulatory Authority, which has been in touch with Robinhood on the matter, according to a spokeswoman for the brokerage regulator. The firm previously agreed to pay $1.25 million to the watchdog for allegedly failing to ensure customers received best prices for securities orders. It didn’tadmit or deny the allegations when settling the complaint.
Financial technology startups can risk eroding customer trust with outages, said John Bartleman, president of TradeStationGroup Inc., a rival online trading firm.