Family lawyers say 20-year-old Alex Kearns linked the app to his death in his suicide note.
“He actually kept the screenshot and attached it to his suicide note; it showed a negative cash balance of $ 730,000,” said Ethan Brown, one of the family’s attorneys.
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The Kearns family is now suing the app, claiming to know how the student could be allocated nearly $ 1 million in leverage.
“In this case, you have a 20-year-old man who doesn’t have a job, he lives at home and has about $ 16,000 in total to trade options, which are very complicated,” said Brown.
According to the lawsuit, Kearns received an email that led him to believe he had suffered a massive loss. The lawsuit alleges that Kearns’ account was restricted, and his family said the 20-year-old panicked.
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The lawsuit alleges that reports from Robinhood were misleading.
“The announcement suggested he owed $ 730,000, and also that he would have to make a margin call in a few days because he had to make up $ 178,000 in cash,” said Brown.
According to court records, Kearns attempted to contact Robinhood customer service and received an automatic response.
“One of the great tragedies of this is that we think he owed nothing at all,” said Brown.
Robinhood responded in a statement, saying in part, “We are devastated by the death of Alex Kearns. We have been making improvements to our range of options since June. In early December, we also added live voice support for customers with an open option position or recent expiration date and plan to expand to other use cases. We’ve also changed our protocol to escalate customers who email us for exercise assistance and early assignment. We remain committed to making Robinhood a place to be responsible learn and invest. “
The Kearns family said Robinhood lured inexperienced investors like Alex to take big risks. Now they are pushing for more changes to protect others.
“They don’t want another family to have a tragic situation like her,” said Brown.
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