The parents of a 20-year-old man who committed suicide after wrongly believing he owed $ 730,000 to Robinhood are planning to trade an illegal death lawsuit against the app, according to a report.
The University of Nebraska student Alexander Kearns, who started trading, experienced problems on June 11 when the app seized his account, which shows that he is $ 730,000 in the red and that he will have more in the coming days. if $ 170,000 must be paid, CBS News reported.
“He thought he was blowing up his life,” Alex’s father, Dan Kearns, said in an interview with the network. “He thought he was hurting irreparably.”
Kearns traded options rather than shares, so the negative balance was probably a temporary amount shown until the options settled on his account.
There was no customer service number for Kearns to call, and although he emailed Robinhood three times, he only received an automated response that the app would get back to him when they could, noting a possible delay in answers, the report reads.
The next day on June 12, Kearns killed himself by stepping in front of an oncoming train.
He left a suicide note with the words: “How could a 20-year-old with no income get a leverage of almost a million dollars?”
Dorothy Kearns, Kearns’ mother, eventually said she ‘lost the love of my life’.
‘I can not tell you how incredibly painful it is. “This is the kind of pain that, in my opinion, would not be possible for an older human being to overcome,” said the desperate mother.
Ironically, the day after his suicide, the app returned to the amateur dealer and said, ‘Good news! We reach out to confirm that you have complied with your margin call and that you have lifted your trading restrictions. ”According to the report.
Dan said the app should have stronger checks to examine for merchant experience.
“How’s the handrail? How does it work – how does it stop an 18 year old from making risky transactions that they do not really understand? ‘Then CBS said referring to a screener question that enables someone to act, even if he or she does not have much experience.
In the case that is expected to be filed on Monday, the parents said according to the news website that Robinhood ‘should be held responsible’.
“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 if you really owe nothing,” Blakeman told the outlet. “It could affect almost anyone.”
Another family lawyer, Ethan Brown, told CBS: ‘They do not offer a mechanism through a phone call, via a 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 about the changes they have made since the devastating death of Kearns, including the addition of instructions and educational materials for options trading and the addition of investigations into more risky industries.
They also now have a call option from a live agent and a mechanism to increase emails like the one Kearns sent, the store reports.
‘We remain committed to making Robinhood a place to learn and invest responsibly. Our mission is to democratize finances for all, ”a spokesman for the app told CBS.
“We have designed Robinhood to be the first and most intuitive mobile, with the aim of making investing feel more familiar and less discouraging to a whole generation of people who have previously been cut out of the financial system,” the statement continued.
Robinhood recently came under fire when it stopped people from buying shares of GameStop and other stocks that exploded in a market crash last month.