The parents of 20-year-old Alex Kearns have filed a lawsuit against the stock-trading app Robinhood, alleging that it caused the wrongful death of their son.
Last June Alex died by suicide, with it being reported that he had a negative balance of $730,000 on the app, which his parents say made him falsely belief he was that far in debt.
TMZ, who obtained the lawsuit, reports the claim by Alex’s parents that he killed himself a day after Robinhood restricted his account through a notice, saying he was at negative $730,000.
The parents say the notice was inaccurate and that Alex tried to get clarification from Robinhood, but was instead given a generic response via email.
He killed himself by standing in the path of a train. His parents say he left a suicide note that asked, “How was a 20-year-old with no income able to get assigned almost a million dollars’ worth of leverage? There was no intention to be assigned this much and take this much risk, and I only thought I was risking the money I actually owned.”
TMZ writes that Robinhood actually emailed Alex back the day after he died, and appeared to suggest he didn’t actually owe the massive amount of money.
The lawsuit is also accusing Robinhood of unfair business practices, in addition to wrongful death.
A spokesperson for the company gave a statement to TMZ.
“We were devastated by Alex Kearns’ death,” that spokesperson said. “Since June, we’ve made improvements to our options offering. These include adding the ability to exercise contracts in the app, guidance to help customers through early assignment, updates to how we display buying power, more educational materials on options, and new financial criteria and revised experience requirements for new customers seeking to trade Level 3 options.”
Further changes are also said to include added voice support, and an attempt to respond to emailed questions more quickly.
Just a few weeks ago Robinhood also came under intense scrutiny for restricting the trade of stocks being snatched up by Redditors (including Gamestop, obviously). It’s facing multiple lawsuits over that too.
