The family of the 20-year-old college student who committed suicide after seeing his Robinhood account was apparently in the red to the tune of more than $700,000 is now suing the trading app. Alex Kearns committed suicide in June after seeing the alarming figure, and his family says he first tried three times to contact customer service about the issue—but was met with automated responses each time. They are now suing the company for wrongful death, negligent infliction of emotional distress, and unfair business practices. The site uses "aggressive tactics and strategy to lure inexperienced and unsophisticated investors," the Illinois family's lawsuit says, per CNBC. His parents tell CBS News their son was somehow allowed to trade options, which is quite risky and can lead to big losses—but he likely didn't actually owe the money he thought he'd lost; in fact, the family lawyers believe he may have actually made a profit.
Kearns was alarmed after getting an email from Robinhood saying he needed to make a payment of more than $170,000 and demanding "immediate action." But when his attempts to contact customer service resulted in no help, he took his life in an attempt to shield his family from what he thought he owed. The next day, Robinhood sent another automated email—this one suggesting the matter had been resolved. "Great news!" it said. "We're reaching out to confirm that you've met your margin call and we've lifted your trade restrictions." The family's lawyers say that due to the way the options bets were structured, Kearns may have been able to make money had he cashed in other options he'd purchased. "The information they gave him was just incredibly skewed," one says, and there was no way to get live help from an actual human being. Robinhood has since come under even more scrutiny, due to what some say is a "gamification" of trading, plus actions the company took during the recent GameStop/Reddit trading saga. (More Robinhood stories.)
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