Robinhood Hit With Wrongful Death Lawsuit After Suicide of 20 Year Old
On June 12, 20-year-old Alexander Kearns committed suicide. In the lawsuit filed on Monday, the parents stated that Robinhood's response to their son's supposed loss of $730,000 played a role in his death. According to the lawsuit, Don and Dorothy Kearns believe Robinhood targets young people and encourages them to place risky trades. Furthermore, the trading platform provides no "meaningful customer support."
Alexander had been trading on Robinhood for several years. On the day that he died, his Robinhood account was restricted and displayed a negative $730,000 cash balance. The lawsuit states that he emailed Robinhood asking for clarification on the massive amount due, saying: "I was incorrectly assigned more money than I should have, my bought puts should have covered the puts I sold. Could someone please look into this?"
Later that night, at 3:26 AM, he received an email from Robinhood demanding "immediate action" in the form of a $170,000 margin call.
The day after his death, Robinhood responded to his email saying: "Great news! We're reaching out to confirm that you've met your margin call and we've lifted your trade restrictions. If you have any questions about your margin call, please feel free to reach out. We're happy to help!"
In a note left for his parents, he asked why he was given "almost $1 million worth of leverage." His parents believe that a more timely response from Robinhood's customer service team would have saved his life. The lawsuit states that Robinhood "must be held accountable" for their son's death.
"The information they gave him was just incredibly skewed," Benjamin Blakeman, one of the Kearns family attorneys, said. "And possibly completely wrong, because they make it look like you owe $730,000 when you really don't owe anything. That could panic just about anybody."
Robinhood has worked to improve its customer service offerings and margin glitches. The trading platform also pledged to better educate its customers and donate $250,000 to the American Foundation for Suicide Prevention.
"We were devastated by Alex Kearns' death," the spokesperson said. "In early December, we also added live voice support for customers with an open options position or recent expiration, and plan to expand to other use cases. We 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 responsibly."
"I lost the love of my life. I miss him more than anything," Dorothy Kearns said. "I can't tell you how incredibly painful it is. It's the kind of pain that I don't think should be humanly possible for a parent to overcome."