According to a report, the parents of a 20-year-old man who committed suicide after mistakenly believing he owed $ 730,000 to the Robinhood plan to file an unlawful death lawsuit against the stock market application.
University of Nebraska student Alexander Kearns, who had started trading, got into trouble on June 11 when the app suspended his account proving he had $ 730,000 in red and had to pay more than $ 170,000 dollars in the coming days, CBS News reported.
“He thought he blew up his life,” Alex’s father, Dan Kearns, said in an interview with the network. “He believed he was ruined without repair.”
Kearns had traded in options trading, rather than stocks, so the negative balance was probably a temporary amount that was displayed until the options were settled into your account.
There was no customer service number to call Kearns, and although he emailed Robinhood three times, he only received an autoresponder that the app would receive when they could, noting a possible delay in answers, according to the report.
The next day, June 12, Kearns committed suicide in front of an oncoming train.
He left behind a suicide note that said, “How could a 20-year-old with no income be assigned nearly $ 1 million in leverage?”
Kearns’ mother, Dorothy Kearns, said on the way out that she “lost the love of my life.”
“I can’t tell you how much pain he has. It’s the kind of pain that I think shouldn’t be humanly possible for a father to overcome, “said the dismayed mother.
Ironically, the app returned to the amateur trader the day after his suicide, saying, “Great news! We are in touch with you to confirm that you have complied with your margin call and that we have lifted the trade restrictions.” according to the report.
Dan said the app should have stronger controls to verify the merchant experience.
“What are these railings like? How does this prevent an 18-year-old from doing risky business that they don’t really understand? “Dan told CBS he was referring to a selection question that allows someone to negotiate even if he answers that he doesn’t have much experience.
In the lawsuit expected to be filed Monday, the parents said Robinhood “must be held accountable,” according to the news site.
“The information they gave him was incredibly biased and possibly completely wrong,” said Benjamin Blakeman, the Kearns family’s attorney.
“Because they make it look like you owe $ 730,000 when you really don’t owe anything,” Blakeman told the dam. “This could panic anyone.”
Another family lawyer, Ethan Brown, told CBS, “They don’t provide any mechanism through a phone call, through a live email service, to get live answers to questions.”
The Kearns said their son only wanted answers and help, according to the report.
Robinhood reported to CBS the changes it has made since Kearns’ devastating death, including the addition of instructions and educational materials for options trading and the addition of experience detection for riskier operations. .
They now also have a callback option from a live agent and a mechanism to increase emails like the one Kearns sent, the media reported.
“We remain committed to making Robinhood a place to learn and invest responsibly. Our mission is to democratize finances for everyone, ”an application spokesman told CBS.
“We designed Robinhood to be the first and most intuitive mobile, with the aim of making the investment feel more familiar and less daunting for a whole generation of people previously outside the financial system,” the statement continued.
Robinhood has been under attack recently when it stopped people from buying GameStop shares and other stocks that exploded the market frenzy last month.