The parents of a 20-year-old man who committed suicide after mistakenly believing he owed $730,000 to Robinhood plan to file a wrongful death suit against the stock-trading app, according to a report.
University of Nebraska student Alexander Kearns, who had begun dabbling in trading, ran into problems on June 11 when the app put a hold on his account showing that he was $730,000 in the red and that he needed to pay over $170,000 in the coming days, CBS News reported.
“He thought he blew up his life,” Alex’s dad Dan Kearns said in an interview with the network. “He thought he screwed up beyond repair.”
Kearns had been trading options, rather than stocks, so the negative balance was probably a temporary amount that showed until the options settled to his account.
There was no customer service number for Kearns to call and while he did email Robinhood three times, he only received a automatic response that the app would get back to him when they could, noting a possible delay in replies, the report said.
The next day on June 12, Kearns killed himself by stepping in front of an oncoming train.
He left behind a suicide note that said, “How was a 20-year-old with no income able to get assigned almost a million dollars worth of leverage?”
Kearns’ mom, Dorothy Kearns told the outlet that she “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,” the distraught mother said.
Ironically, the app got back to the amateur trader the day after his suicide, saying, “Great news! We’re reaching out to confirm that you’ve met your margin call and we’ve lifted your trade restrictions.” according to the report.
Dan said that the app should have stronger checks in place to screen for trader experience.
“How are those guardrails? How does that — how does that stop an 18-year-old from making risky trades that they don’t really understand?” Dan told CBS referring to a screener question that allows someone to trade even if they respond that they don’t have much experience.
In the suit expected to be filed Monday, the parents said Robinhood “must be held accountable,” according to the news site.
“The information they gave him was just incredibly skewed and possibly completely wrong,” said Benjamin Blakeman, the Kearns family lawyer.
“Because they make it look like you owe $730,000 when you really don’t owe anything,” Blakeman told the outlet. “That could panic just about anybody.”
Another lawyer for the family, Ethan Brown, told CBS, “they provide no mechanism through a telephone call, through live email service, to get live answers to questions.”
The Kearns said their son just wanted answers and help, the report said.
Robinhood told CBS of the changes they had made since Kearns’ devastating death, including adding instructions and educational materials for options trading and adding screening for experience for riskier trades.
They also now have a call back option from a live agent and a mechanism in place to escalate emails like the one that 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,” a spokesperson for the app told CBS.
“We designed Robinhood to be mobile-first and intuitive, with the goal of making investing feel more familiar and less daunting for an entire generation of people previously cut out of the financial system,” the statement continued.
Robinhood has recently came under fire when it stopped people from buying shares of GameStop and other stocks that exploded in a market frenzy last month.