The parents of a 20-year-old man who committed suicide after falsely believed he owed $ 730,000 to Robinhood planned to file a wrongful death sentence against the stock trading app, according to a report.
Alexander Kearns, a college student at the University of Nebraska who started bobbing in the trade, ran into trouble on June 11 when the app shut down his account and revealed that he was $ 730,000 in the red and that he had more than $ 170,000 had to pay. CBS News reported.
“He thought he blew up his life,” Alex’s father Dan Kearns said in an interview with the network. “He thought he’d ruined it beyond repair.”
Kearns traded options rather than stocks, so the negative balance was likely a temporary amount that showed up until the options settled in his account.
There was no customer service number for Kearns to call, and although he emailed Robinhood three times, he only received an automatic reply that the app would contact him if they could, noting that replies may have been delayed, the report said. .
The next day, on June 12, Kearns committed suicide by stepping in front of an oncoming train.
He left a suicide note that said, “How could a 20-year-old with no income be allocated nearly a million dollars in leverage?”
Kearns’ mother, Dorothy Kearns, told the outlet that she “lost the love of my life”.
‘I can’t tell you how incredibly painful it is. It’s the kind of pain that I don’t think humanly should be possible for a parent to overcome, ”said the distraught mother.
Ironically, the app came back to the amateur dealer the day after his suicide and said, “Great news! We will be in touch to confirm that you have fulfilled your margin call and we have lifted your trading restrictions. according to the report.
Dan said the app should have stricter controls to screen for trader experience.
‘How are those crash barriers? How’s that like – how does that stop an 18-year-old from doing risky trades that they don’t really understand? Dan told CBS that he’s referring to a screener question that someone can trade with, even if they answer that they don’t have much experience.
In the lawsuit expected to be filed Monday, parents said Robinhood “should be held accountable,” the news site said.
“The information they gave him was just incredibly skewed and possibly all wrong,” said Benjamin Blakeman, Kearns’ family law attorney.
“Because they make it look like you owe $ 730,000 when you really don’t owe anything,” Blakeman told the outlet. “That can panic almost anyone.”
Another family attorney, Ethan Brown, told CBS, “they don’t provide a phone call mechanism, through live email service, to get live answers to questions.”
The Kearns said their son just wanted answers and help, the report said.
Robinhood told CBS about the changes they had made since Kearns’ devastating death, including adding instructions and educational materials for trading options and adding experience screening for riskier trades.
They also now have a live agent callback option and a mechanism to escalate emails like Kearns’s, the outlet reported.
“We remain committed to making Robinhood a place to learn and invest responsibly. Our mission is to democratize finances for everyone, ”a spokesman for the app told CBS.
“We designed Robinhood to be mobile and intuitive, with the goal of making investing feel more familiar and less daunting to an entire generation of people who had previously left the financial system,” the statement continued.
Robinhood has recently come under fire when it stopped people from buying GameStop shares and other stocks that exploded into market frenzy last month.