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“Tragically, Robinhood’s communications were completely misleading, because, in reality, Alex did not owe any money he held options in his account that more than covered his obligation, and the massive negative balance would have been erased by the exercise and settlement of the” options Kearns held, according to the lawsuit.ĮX-FED OFFICIAL SAYS TRADING FRENZY A ‘CONCERN,’ BUT DOUBTS LIKELIHOOD OF REGULATORY ACTIONĪfter not being able to speak to anyone from Robinhood, the lawsuit alleged that he became fearful over the financial obligation, which "resulted in a highly distressed mental condition in Alex, an uncontrollable impulse to commit suicide as the only option he could see. A college student has committed suicide after seeing a negative cash balance of 730,165 in his account on the Robinhood stock trading app. New York (CNN Business)Robinhood has settled a wrongful death lawsuit filed by the family of a 20-year-old trader who died by suicide after seeing a negative account balance of 730,000. The family of 20-year-old Alex Kearns is suing popular stock trading app Robinhood after Kearns died by suicide last year, believing he was hundreds of thousands of dollars in debt. The response came after he sent multiple emails to Robinhood's customer support, but only received auto-generated replies, the lawsuit alleged. The family of a 20-year-old man filed a lawsuit against the investment Robinhood on Monday, saying its popular investment app was responsible for the students suicide. How was a 20-year-old with no income able to get assigned almost 1 million worth of leverage the suit says, citing last written. the following morning saying he needed to deposit more than $178,000 within seven days to begin to address his negative balance, the lawsuit added. Family of Robinhood user who died by suicide sues company.
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Kearns received emails from Robinhood informing him that his account was restricted on June 11 and that he was required to buy $700,000 in shares as a result of an options trade, which left his account with a negative balance of $730,000, according to the lawsuit.ĭespite being under the understanding he would be limited to a maximum loss of less than $10,000, Kearns then got an email from Robinhood around 3:30 a.m. Kearns' family claimed the popular stock-trading platform’s business practices “directly” led to their son’s death, with his mother and father alleging that Robinhood targeted young and inexperienced customers.