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The family of a young investor who killed himself thinking he had suffered huge losses on Robinhood have sued the trading app.
Alexander Kearns, 20, took his own life when he mistakenly believed he had lost $730,000 on the trading platform, that he had used since high school.
His parents plan to file a lawsuit on Monday accusing Robinhood of wrongful death, negligent infliction of emotional distress and unfair business practices, according to CBS News.
In the lawsuit the family allege that Robinhood targeted young and inexperienced customers, then pushed them to engage in risky trading practices.
In a note to his parents before he died last June he told them “I also have no clue what I was doing now in hindsight.”
Dan and Dorothy Kearns told CBS News that their son had been approved to buy and sell option trades, which can leave temporary balances and debts over a number of days.
On the day he died their son’s account had been restricted by Robinhood and showed a debt of $730,000.
Mr Kearns then emailed Robinhood asking for clarification on the situation.
“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?” he wrote.
But he only received an automated reply saying that the company was “working to get back” to him.
The day after his death Robinhood emailed him back with a full response.
“Great news! We’re reaching out to confirm that you’ve met your margin call and we’ve lifted your trade restrictions,” they wrote.
“If you have any questions about your margin call, please feel free to reach out. We’re happy to help!”
His mother told CBS News about the pain that her son’s death had caused the family.
“I lost the love of my life. I miss him more than anything,” said Dorothy Kearns.
“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.”
Robinhood says that following the death of Mr Kearns they have “revised experience requirements” for customers seeking riskier types of options.
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