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The parents of a 20-year-old man who committed suicide after mistakenly believing he owed Robinhood $ 730,000 are planning to take legal action against the stock trading app, according to a report.
Alexander Kearns, a University of Nebraska student, who had started trading, encountered problems on June 11 when the app put his account on hold, showing he had $ 730,000 in the red and that he was due to pay more than $ 170,000 in the coming days, CBS News reported.
“He thought he blew his life,” Alex’s father Dan Kearns said in an interview with the network. “He thought he messed up beyond repair.
Kearns had traded options rather than stocks, so the negative balance was likely a temporary amount that showed up until the options were settled in his account.
Kearns didn’t have a customer service number to call, and although he emailed Robinhood three times, he only received an automatic reply that the app would come back to him when they could, noting a possible delay in responses, according to the report.
The next day, June 12, Kearns committed suicide while walking in front of an oncoming train.
He left behind a suicide note that read, “How could a 20-year-old with no income have been given leverage worth almost a million dollars?”
Kearns’ mother Dorothy Kearns told the outlet that she “had 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 should be humanly possible for a parent to overcome, ”said the distraught mother.
Ironically, the app came back to the hobbyist trader the day after his suicide, saying, “Good news! We are contacting you to confirm that you have respected your margin call and we have lifted your trading restrictions. “according to the report.
Dan said the app should have tighter controls to verify merchant experience.
“How are these railings? How does that – how does that stop an 18 year old from doing risky trades that he doesn’t really understand? Dan told CBS, referring to a screening question that allows someone to negotiate even if they respond that they don’t have much experience.
In the lawsuit set to be filed on Monday, parents said Robinhood “must be held accountable,” according to the news site.
“The information they gave him was just incredibly false and possibly completely false,” said Benjamin Blakeman, the Kearns family attorney.
“Because they make it look like you owe $ 730,000 when you really don’t owe anything,” Blakeman told the outlet. “It could freak out just about 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 just wanted answers and help, according to the report.
Robinhood informed CBS about the changes they have made since Kearns’ devastating death, including the addition of instructions and educational material for options trading and the addition of experience screening for trades more risky.
They also now have a live agent callback option and a mechanism in place to escalate emails like the one Kearns sent, the outlet reported.
“We remain committed to making Robinhood a place to learn and invest responsibly. Our mission is to democratize finance for all, ”an app spokesperson told CBS.
“We designed Robinhood to be mobile first and intuitive, with the goal of making investing more familiar and less intimidating for an entire generation of people previously excluded from the financial system,” the statement continued.
Robinhood was recently criticized when it blocked people from buying GameStop and other stocks that exploded into a market frenzy last month.
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