Family Sues Robinhood Over the Death of 20-Year-Old Trader Who Assumed He was in Debt

The family of the 20-year-old college student who committed suicide last summer is suing Robinhood for the wrongful death of their son.

Late Alexander Kearns committed suicide after his Robinhood trading account showed a negative balance of $730,000 and mistakenly assumed that was the amount of money he was owing.

The Kearns family accused the trading platform of luring amateur investors like the late Alex to take big risks in investing in high-risk financial instruments without providing adequate customer support and investment guidance.

“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 on Monday in California. “This case centers on Robinhood’s aggressive tactics and strategy to lure inexperienced and unsophisticated investors, including Alex, to take big risks with the lure of tantalizing profits.”

The bereaved family also accused Robinhood of negligence and infliction of emotional duress, as well as unethical business practices. The damages the family is seeking will be determined at a later date.

“Tragically, Robinhood’s communications were completely misleading because, in reality, Alex did not owe any money,” the lawsuit reads.

The complaints also stated that Kearns made three attempts to contact the customer service concerning the misunderstanding but it was to no avail. Automated responses were sent to the young Kearns.

The Kearns’ family lawsuit also stated that “not only did Robinhood permit Alex to open the account, but when Alex was a freshman in college later that year, it permitted him to trade options.” Worst of all, Robinhood provided little to no investment guidance and its customer ‘service’ was “virtually nonexistent, consisting of automated e-mail replies devoid of any human contact or interaction.”

The family accused Robinhood of allowing the deceased trader to pile up on too much risk. He claimed that the puts he bought and shares sold should have canceled out, instead he incurred huge losses, according to the note he left to his family.

“How was a 20-year-old with no income able to get assigned almost a million dollars worth of leverage?” Kearns wrote. “There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually.”

Robinhood acknowledged that there was a fault with its options offering and made improvements on it since last June, according to a Robinhood spokesperson.

Puts are options that allow the owner to sell a security at a specified price.

Robinhood is a stock market trading platform that has grown popular for first time investors who want to enter the stock market for the first time. The platform has grown from 1 million users in 2016 to over 13 million users as of last spring.

The CEO of the platform, Vlad Tenev has come under scrutiny for its “gamification” of investment and strategic marketing practices. Class-action lawsuits have also been charged against Robinhood by clients after the platform decided to restrict trading in selected securities during the recent GameStop controversy.