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Vlad Tenev details the improvements made to his trading platform during the Chamber hearing.
Robinhood CEO Vlad Tenev apologized to the family of Alex Kearns, the young client who committed suicide last year after experiencing catastrophic trading issues, during part of his testimony at Congress Thursday on the GameStop trending frenzy.
“I feel sorry for Mr. Kearns’ family for your loss. The passing of Mr. Kearns has been deeply troubling to me and to the entire company,” Tenev said in response to a question. Previously, the company issued a statement on his death.
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Kearns’ family is suing Robinhood, claiming that the 20-year-old University of Nebraska-Lincoln student mistakenly believed he owed more than $ 700,000 on a risky options bet.
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“Not only did Robinhood allow Alex to open the account, but when Alex was a freshman in college later that year, it allowed him to trade options. Those options, it turned out , risked forcing him to pay more than $ 700,000 in securities, an amount he had no way of paying. Worse yet, Robinhood provided virtually no investment guidance, and its client ‘service’ was virtually non-existent, consisting of automated responses via email, devoid of any human contact or interaction “according to the complaint examined by FOX Business.
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Filed in a Santa Clara County California state court last month, she seeks unspecified damages on behalf of Kearns’ parents and sister for wrongful death, negligent infliction of emotional distress and unfair business practices .
Tenev was also pressed for what the company did to avoid similar failures.
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“There have been several improvements, one of which we added the ability to exercise instantly, as well as exercise option positions in the app. We have clarified the display of purchasing power, especially negative purchasing power in situations where a leg of a complex multi-segment options trade needs to be assigned. We have also added option education specialists and we have also added live phone customer support for acute option cases, ”he explained.
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Robinhood and other companies have been taken to social media during times of extreme trading over long wait times for customer service reps, which includes the height of pandemic market volatility last March, as well as the last month during the GameStop chaos.
[Editor’s note: This story discusses suicide. If you or someone you know is having thoughts of suicide, please contact the National Suicide Prevention Lifeline at 1-800-273-TALK (8255)]
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