Alex Kearns Wiki
The family of a man who committed suicide last year sued business practice Robinhood over his death.
The case, first reported by CBS News, said that 20-year-old Alex Kearns mistakenly believed he owed $ 730,000 (£ 530,000) when he took his own life.
Dan and Dorothy Kearns say that their son didn’t get help or support from customer service before he died.
Robinhood told the BBC that they were “devastated” by Alex’s death and made improvements.
The application, which allows everyone to buy and sell stocks, says on its website that it is “on a mission to democratize finances” and is currently running an advertising campaign with the slogan “We are all investors”.
The US retailer GameStop recently made headlines to limit the sale of some shares to users after seeing the stock increase.
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Speaking to CBS, Alex Kearns’ parents say he started using Robinhood just before he graduated high school.
Mr. and Mrs. Kearns say they do not know that despite the lack of financial experience, the app allows him to buy and sell options that are a risky financial instrument.
They said that their son realized that on June 11, 2020, his account was constrained by Robinhood, who appeared to have more than $ 700,000 negative balance in his account.
CBS reported that the student received an automated email at 3:26 am the next morning asking him to “act now” to pay more than $ 170,000 within days.
The family said she had emailed the 20-year-old customer service several times to ask for support and helped her understand the numbers on the trading account, but only received stock response messages stating that they would get back to her.
“They provide no mechanism to get live answers to questions via phone call, live e-mail service,” a lawyer for the family told CBS.
That day, on June 12, his family was told by the police that Alex was dead.
Mr. Kearns said in the interview that his son “needed some help,” “he thought he was ruining his life.
His parents said that an email from Robinhood the day after his death explained that the trade restrictions had been lifted and the trade was resolved.
The lawsuit filed in California state court said the loss was met with other options on account and accused Robinhood’s “misleading communications” of causing “panic and confusion.”
According to US media reports, the unfair death case accuses Robinhood of unfair business practices and negligent emotional distress.
Robinhood told the BBC that they have demonstrated their purchasing power since June and made improvements to their “choice offerings”, including more training material and revised experience requirements for users.
“In early December, we also added live audio support for customers with open options or expired, and planned to expand to other use cases,” a spokesperson said. “We’ve also changed our protocol to upgrade customers who email us for help with exercise and early assignment.
“We are determined to make Robinhood a place to learn and invest responsibly,” they added.