The family of a university student who took his life after thinking he had lost nearly $ 750,000 on Robinhood filed an unlawful death lawsuit against the stock trading company on Monday.
The mother, father and sister of 20-year-old Alex Kearns, who died in June, have filed a lawsuit in California state court accusing Robinhood of wrongful death, negligent infliction of emotional distress and unfair business practices, according to the first complaint obtained by CBS News.
Kearns’ family claims the company’s “reckless conduct that caused the immediate and near death of one of its victims” through “misleading communication” about its investments and ‘virtually non-existent’ customer service, The Wall Street Journal reported, with reference to the complaint.
Kearns was a University of Nebraska-Lincoln student who started using Robinhood during high school. He started an options trade through the stock trading app and thought his biggest possible loss would be less than $ 10,000.
Last year in June, Kearns learned that his account had been closed due to an apparent negative balance of $ 730,000. Robinhood sent an automated email at 3:26 a.m. asking Kearns to take “immediate action” within a few days to pay about $ 178,000, CBS News reported.
The complaint states that Kearns sent an email to Robinhood’s support team three times that evening and the following morning asking for help, saying: ‘I got the wrong amount of money by mistake, I had to buy my wells cover the points of sale I sold. ‘ He allegedly received only automated responses and Robinhood did not provide a customer service phone number.
The complaint also alleges that Robinhood Kearns did not inform that he possibly had options he could use that would “cover more than his obligation”, the Journal reported according to the complaint.
In a remark to the family before he killed himself, Kearns questioned how he was able to trade with a high stake, saying he had ‘no idea what I was doing afterwards’ and thought he’d risk the money I actually own, ”according to CBS News.
‘Although Alex’s panic and confusion were clearly caused by Robinhood’s deception communication, Robinhood was impossible to reach at the most critical moment repair the damage it caused, ”reads the complaint.
Robinhood did not immediately respond to The Hill’s request for comment, but told the Journal that it was ‘devastated by the death of Alex Kearns’.
“We remain committed to making Robinhood a place to learn and invest responsibly,” a spokesman for the newspaper said, adding that the company now offers additional tools and options training.
The spokesman also said Robinhood traded its suitability requirements for options, adjusted its response to customer service to increase certain requests for help, and created ‘live voice support’ for those with an open or recently expired option position.
The stock trading business became popular during the coronavirus pandemic last year when millions of users joined the platform.
Robinhood is also facing customer litigation after the company restricted trading in GameStop and other stocks amid the subreddit campaign r / WallStreetBets that rocked Wall Street earlier this month.