The circumstances surrounding Kearns' tragic death are recounted in a Wednesday-released Forbes report from Sergei Klebnikov and Antoine Gara, who also pointed out that the negative cash balance (displayed in red on the account) "may not have represented uncollateralized indebtedness at all." Instead, they explained, it could have shown a temporary balance that would have changed once the stocks underlying his assigned options later settled into the account.
"All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend,"a rep said in a statement, adding that information regarding Kearns' account could not be made public at this time for privacy reasons.
The app has recently seen a surge in popularity, though Kearns' death is shining a light on the importance (and arguable shortcomings) of the interfaces used by the service and others like it. Kearns' cousin-in-law Bill Brewster, for example, argued that the interface essentially makes trading into a game.
"Tragically, I don't even think he made that big of a mistake," Brewster, who is a research analyst, told Forbes. "This is an interface issue, they have slick interfaces."
Kearns died on June 12. Per the report, his parents discovered a note on his computer in which he asked how a 20-year-old "with no income" was able to "get assigned almost a million dollars worth of leverage." Also in the note, Kearns said he had "no clue" what he was doing on Robinhood.
Read the full Forbes report, which includes an explanation on how a "bull put spread" could make for a confusingly large stock position in a portfolio, here.
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