Robinhood has been hit with a wrongful death lawsuit by an Illinois couple whose 20-year-old son took his own life last year after suffering what he believed to be a massive loss on the stock-trading app.
According to court documents filed Monday, Alex Kearns died by suicide last June shortly after Robinhood allegedly led him to believe he owed $730,000 after making some stock trades.
Dan and Dorothy Kearns of Naperville, Illinois, accused Robinhood of using “aggressive tactics and strategy to lure inexperienced and unsophisticated investors” like their son, a University of Nebraska student, “to take big risks with the lure of tantalizing profits.” They are seeking unspecified damages.
According to the lawsuit, Alex Kearns attempted to reach Robinhood’s customer service on multiple occasions after receiving an email asking for a minimum deposit of more than $170,000 on what he thought was a $730,000 loss. In reality, the perceived loss was covered by other options in his account, according to the lawsuit.
“Though Alex’s panic and confusion were clearly caused by Robinhood’s misleading communications, Robinhood was impossible to reach at the most critical moment to repair the damage it created,” reads the complaint, which can be found in full here. The lack of communication “resulted in a highly distressed mental condition” that ended with Alex taking his own life.
“I lost the love of my life. I miss him more than anything,” Dorothy Kearns told “CBS This Morning” in a Monday interview. “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.”
Watch Dan and Dorothy Kearns’ “CBS This Morning” interview below.
Added Dan Kearns: “[Alex] thought he blew up his life. He thought he screwed up beyond repair.”
The lawsuit follows weeks of scrutiny surrounding Robinhood’s easy-to-use, commission-free trading in the wake of January’s Reddit investor-fueled GameStop debacle.
In an email sent to HuffPost on Tuesday, a Robinhood spokesperson said the company was “devastated” by Alex Kearns’ death, and had since “made improvements to our options offering” as a result.
“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,” the spokesperson added. “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.”