The family of a college student who ended his life after thinking he had lost nearly $ 750,000 to Robinhood on Monday filed a lawsuit for illegal death against the stock company.
The mother, father and sister of 20-year-old Alex Kearns, who died in June, filed a lawsuit in California state court accusing Robinhood of illegal death, neglect of emotional distress and practices. unfair trade, according to the complaint that was the first. obtained by CBS News.
Kearns’ family alleges that “the company’s reckless conduct caused the death of one of its victims directly and immediately” through “misleading communications.” about their investments and “virtually non-existent” customer service, The Wall Street Journal reported, citing the complaint.
Kearns was a student at the University of Nebraska-Lincoln who had begun using Robinhood during high school. He started an options trade through the stock trading app, thinking his highest loss would be less than $ 10,000.
Last June, Kearns learned his account was closed due to an apparent negative balance of $ 730,000. Robinhood sent an automatic email at 3:26 a.m. asking Kearns to take “immediate action” to pay about $ 178,000 in a few days, CBS News reported.
The complaint says Kearns emailed the Robinhood support team three times that night and the next morning, asking for help and saying, “I was incorrectly allocated more money than I should have, my purchased sites should have covered the sites I sold. ” He allegedly only received automatic responses and Robinhood did not offer any customer service phone numbers.
The complaint also alleges that Robinhood did not inform Kearns that he could have had options he could use that would have “fully covered his obligation,” the newspaper reported.
In a note to the family before committing suicide, Kearns wondered how he was able to do business with a large turnout, saying he “had no idea what he was doing now in retrospect” and thought he was “risking the money he really owned. ” According to CBS News.
“Although Alex’s panic and confusion were clearly caused by Robinhood’s deceptive deception communications, Robinhood was impossible to reach at the most critical moment repair the damage it had caused, “the complaint said.
Robinhood did not immediately respond to The Hill’s request for comment, but told the newspaper it was “devastated by the death of Alex Kearns.”
“We remain committed to making Robinhood a place to learn and invest responsibly,” a spokesman told the newspaper, noting that the company now offers additional tools and education on options.
The spokesman also said Robinhood has edited its eligibility requirements for options trading, adjusted customer service response to increase certain requests for help, and created “voice support in direct “for those with open or recently expired option sites.
The stock company has grown in popularity over the past year during the coronavirus pandemic as millions of users joined the platform.
Robinhood is also facing collective customer lawsuits after the company restricted GameStop trading and other shares amid the r / WallStreetBets subreddit campaign that rocked Wall Street earlier this month.