- Rep. Sean Casten called Robinhood’s unmanned helpline during Thursday’s hearing.
- Casten accuses Robinhood of taking advantage of inexperienced traders.
- Robinhood’s CEO apologized to the family of a young Robinhood user who died by suicide.
- Visit the Insider Business Department for more stories.
During the hearing conducted by the House Financial Services Committee on the GameStop frenzy, Sean Casten (R-IL) called Robinhood’s helpline and played the company’s 12-second message, which ends in a hang-up around the to give viewers a sense of support. Robinhood users receive from the company.
The trial largely focused on the role of Robinhood in the GameStop shares. The platform functions as a website that wants to make the stock market more accessible by offering trading options without commission money. Casten told Robinhood CEO Vladimir Tenev that the company benefits from inexperienced traders on its website.
“There’s an innate tension in your business model between democratizing finances, which is a noble vocation, and being a channel to feed fish to sharks,” Casten said.
The representative referred to the death of a 20-year-old trader who died by suicide after the platform wrongly showed that he had lost $ 730,000 on the Robinhood app. Robinhood trader Alexander Kearns called the helpline after discovering the loss and sent several emails about the canceled options to the company, but initially received no response.
While there was later a response to Kearns’ email, which indicated the $ 730,000 error in the app, Kearns is already dead.
Casten pointed out that the helpline that Kearns called was unmanned and ended his five-minute interrogation during the trial by playing the 12-second message asked when someone calls the helpline. The message tells callers to ask for help online or through the app before hanging up.
Tenev said earlier in his testimony to Congress that many Robinhood users identify themselves as first-time investors and are usually younger than the average investor.
“The history of financial regulation is to protect people like Alex Kearns from the system,” Casten said. “Under Illinois law, he may not buy a beer, but he may take $ 730,000 in positions and expose that he did not have the liquidity to cover.”
Earlier in the trial, Tenev apologized to the Kearns family.
“I am sorry for the family of Mr. “Kearns about your loss,” Tenev said. ‘The passing of mr. Kearns was very disturbing to me and to the whole company. ‘
Tenev said Robinhood wants to expand the number of customer support centers he uses and plans to increase his direct telephone support.
Kearns’ parents, Dan and Dorothy Kearns, filed a lawsuit against Robinhood in January. According to the lawsuit, Robinhood offered no ‘significant customer support’ to investors, according to the lawsuit.