Family lawyers say 20-year-old Alex Kearns connected the app to his death on his suicide note.
“He actually saved the screenshot, attached it to his suicide note; it showed a negative cash balance of $ 730,000,” said Ethan Brown, one of the family’s lawyers.
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The Kearns family is suing the app, demanding to know how the college student managed to allocate a leverage of about $ 1 million.
“In this case, you have a 20-year-old man who has no job, lives at home, and has a total of about $ 16,000 to change options, which is very complicated,” Brown said.
According to the lawsuit, Kearns received an email that led him to believe he suffered a massive loss. The lawsuit claims Kearns’ account was restricted and his family said the 20-year-old panicked.
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The lawsuit alleges that Robinhood’s communications were misleading.
“The communication suggested he owed $ 730,000 and also that he should make a margin call in a matter of days, having to arrive with $ 178,000 in cash,” Brown said.
According to court documents, Kearns attempted to contact Robinhood customer service and received an automatic response.
“One of the great tragedies of this is that we don’t think he owed anything,” Brown said.
Robinhood responded in a statement, saying in part, “We are devastated by the death of Alex Kearns. Since June we have made improvements to our range of options. In early December, we also added live voice assistance to to customers with an open options position or recent expiration and we plan to expand to other use cases.We have also changed our protocol to increase customers who send us an email to get help with exercise and assignment We are committed to making Robinhood a place to learn and invest responsibly. “
The Kearns family said Robinhood attracted inexperienced investors like Alex to take big risks. They are now pushing for more changes to protect others.
“They don’t want any other family to have a tragic situation like the one they had,” Brown said.
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