The family of a college student who took his life after thinking he had lost nearly $ 750,000 in Robinhood filed a wrongful death lawsuit against the stock company on Monday.
The mother, father and sister of Alex Kearns, 20, who died in June, filed a lawsuit in California state court accusing Robinhood of unjust death, negligent infliction of emotional suffering and unfair business practices, according to the complaint that was first obtained by CBS News.
The Kearns family claims that the “reckless conduct of the company directly and immediately caused the death of one of its victims” through “misleading communications” about your investments and “virtually nonexistent” customer service, The Wall Street Journal reported, citing the complaint.
Kearns was a student at the University of Nebraska-Lincoln who started using Robinhood during high school. He started trading options through the stock trading app, thinking his biggest possible loss would be less than $ 10,000.
Last June, Kearns learned that his account was blocked because of an apparent negative balance of $ 730,000. Robinhood sent an automatic email late at night at 3:26 am asking Kearns to take “immediate action” to pay about $ 178,000 in a few days, CBS News reported.
The complaint says that Kearns sent an email to Robinhood’s support team three times that night and the next morning, asking for help and saying, “I received incorrectly more money than I should have, my put options should cover put options that I sold. ” He supposedly received only automatic responses and Robinhood did not offer a customer service phone number.
The complaint also alleges that Robinhood did not inform Kearns that he might have options that could “more than cover his obligation,” reported the Journal, according to the complaint.
In a note to the family before he killed himself, Kearns questioned how he was able to conduct high-risk negotiations, saying that he “had no idea what I was doing now” and thought he was “risking the money I really owned, ”According to CBS News.
“Although Alex’s panic and confusion were clearly caused by Robinhood’s mistake communications, Robinhood was impossible to reach at the most critical moment for repair the damage it had created ”, said the complaint.
Robinhood did not immediately respond to The Hill’s request for comment, but told the Journal that he was “devastated by the death of Alex Kearns”.
“We remain committed to making Robinhood a place to learn and invest responsibly,” said a spokesman for the newspaper, noting that the company now provides additional tools and education about options.
The spokesman also said that Robinhood edited his eligibility requirements for options trading, adjusted his customer service response to escalate certain requests for help and created “live voice support” for those with recently opened or expired option positions. .
The stock trading company’s popularity grew in the last year during the coronavirus pandemic, as millions of users joined the platform.
Robinhood is also facing collective lawsuits from clients after the company restricted the GameStop trade and other actions amid the subreddit r / WallStreetBets campaign that rocked Wall Street earlier this month.