Family lawyers say 20-year-old Alex Kearns connected the app to his death on his suicide note.
“In fact, he saved the screenshot, attached it to the suicide note; it showed a negative cash balance of $ 730,000,” said Ethan Brown, one of the family’s lawyers.
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The Kearns family is now processing the application, demanding to know how the college student managed to get almost $ 1 million in leverage.
“In this case, you have a 20-year-old man who has no job, is living at home and has a total of about $ 16,000 to trade options, which are very complicated,” said Brown.
According to the lawsuit, Kearns received an email that led him to believe he suffered a massive loss. The lawsuit says Kearns’s account has been restricted, and his family said the 20-year-old panicked.
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The suit alleges that Robinhood’s communications were misleading.
“The communication suggested that he owed $ 730,000 and also that he would have to make a margin call in a matter of days, having to raise $ 178,000 in cash,” said Brown.
According to court documents, Kearns tried to contact Robinhood customer service and received an automatic response.
“One of the great tragedies of this is that we think he owed absolutely nothing,” said Brown.
Robinhood responded in a statement, saying in part: “We are devastated by the death of Alex Kearns. Since June, we have made improvements to our options offering. In early December, we also added live voice support for customers with a position of open options or recent expiration and we plan to expand to other use cases. We’ve also changed our protocol to escalate customers who email us for help with exercise and early assignment. We remain committed to making Robinhood a place to learn and invest With responsability. “
The Kearns family said Robinhood attracted inexperienced investors like Alex to take big risks. Now they are pushing for more changes to protect others.
“They don’t want any other family to go through a tragic situation like theirs,” said Brown.
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