![]() His panic and desperation grew as he was unable to communicate over a number of hours with anyone at Robinhood,” the lawsuit said, adding that he repeatedly tried and failed to reach out to representatives at the company. His Robinhood account reflected a negative cash balance in the amount of $730,000 – far more money than he had, the lawsuit said. Kearns, who started using Robinhood when he was a senior in high school, died by suicide in June after placing an options spread trade containing a risk “Alex did not understand,” according to the lawsuit. ![]() “We remain committed to making Robinhood a place to learn and invest responsibly.” “We were devastated by Alex Kearns’ death,” Robinhood said. In a statement, Robinhood explained it has made a series of improvements to its options offering, including by providing guidance to help customers, updates on how it displays buying power and live voice support for customers with open options positions. (GME) – a controversial step that prompted Congress to schedule hearings. Robinhood sparked outrage last month by temporarily suspending purchases of GameStop (GME), which was catapulted by an army of traders on Reddit. Those risks have been further magnified recently with the rise and fall of GameStop The tragedy illustrated the potential dangers of the free-trading boom set off in large part by Robinhood, which has enjoyed explosive growth during the pandemic. “Tragically, Robinhood’s communications were completely misleading because, in reality, Alex did not owe any money,” the lawsuit said. Robinhood's CEO is not licensed by a powerful Wall Street regulator (Photo by Noam Galai/Getty Images for TechCrunch) Noam Galai/Getty Images The damages they are seeking will be determined at a later date.Ĭo-founder and co-CEO of Robinhood Vladimir Tenev speaks onstage during TechCrunch Disrupt NY 2016 at Brooklyn Cruise Terminal on in New York City. In addition to wrongful death, the complaint filed by the Illinois family accuses Robinhood of negligent infliction of emotional stress and unfair business practices. “Robinhood built out its trading platform to look much like a videogame to attract young users and minimize the appearance of real-world risk,” reads the lawsuit filed Monday in California by Kearns’ parents Dan and Dorothy and sister Sydney. ![]() The parents and sister of Alexander Kearns accused Robinhood of luring inexperienced investors like their son to take big risks in sophisticated financial instruments such as the options trading he engaged in – without providing the necessary customer support and investment guidance. Robinhood is being sued for the wrongful death of a 20-year-old college student who died by suicide last summer after he saw a negative balance of $730,000 in his trading account and mistakenly believed that was the sum of money he owed.
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