Parents Sue Robinhood Trading App After Son Commits Suicide
Twenty-year-old Alex Kearns’ parents are suing the popular stock trading app Robinhood after their son committed suicide. Dan and Dorothy Kearns told CBS News that their son believed he had owed nearly $750,000 over a risky bet using the app.
Dan and Dorothy Kearns filed a lawsuit accusing Robinhood of “wrongful death, negligent infliction of emotional distress, and unfair business practices.” The lawsuit also points out the limited responsiveness of Robinhood customer support.
On June 11, 2020, Alex logged into Robinhood and discovered that he apparently owed $730,000. The next day, an automated message was sent to him, claiming that he needed to pay at least $170,000 in the next few days. Alex tried to find a customer support phone number, but he had to contact Robinhood through email since he could not find one.
An automated message told Alex, “Thanks for reaching out to our support team!” It added: “We wanted to let you know that we’re working to get back to you as soon as possible, but that our response time to you may be delayed.”
The message contributed to Alex’s decision to commit suicide. Before he did so, he left a fiery note to his parents that denounced Robinhood’s business practices, specifically its willingness to give $1 million worth of leverage to a 20-year-old with no income.
“The puts I bought/sold should have canceled out, too, but I also have no clue what I was doing now in hindsight. There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually owned. If you check the app, the margin investing option isn’t even ‘turned on’ for me. A painful lesson. F*** Robinhood,” Alex wrote in his final note.
Alex started investing on Robinhood while he was still in high school, using money from his summer job and birthday gifts to get started. His father told CBS News that this totaled to about $5,000. Before Alex began investing, his parents said that they talked to him about investing responsibly.
A day after Alex’s suicide, the Robinhood support team sent an email that told Alex he didn’t owe any money. “Great news!” The email read, according to CBS, “We’re reaching out to confirm that you’ve met your margin call and we’ve lifted your trade restrictions. If you have any questions about your margin call, please feel free to reach out. We’re happy to help!”
“He thought he blew up his life. He thought he screwed up beyond repair,” Mr. Kearns told CBS News.
Robinhood’s CEO declined an interview with CBS. Instead, the company released a statement that they were “devastated by Alex Kearns’ death.”
All of us are heartbroken by the recent death of Robinhood customer Alex Kearns. Read a note from our founders about actions we’re taking across eligibility, educational resources, and our user interface.https://t.co/9CA0kT8OCK pic.twitter.com/7zqDcK1EPN
— Robinhood (@RobinhoodApp) June 19, 2020
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