Parents sue Robinhood free-trading app after their 20-year-old son died by suicide thinking he lost $730,000
Back in June 2020, we wrote about a 20-year stock trader Alexander E. Kearns who took his own life after he misunderstood a potential loss from a stock-options trade. Kearns later committed suicide after he saw a $730,000 negative balance in his Robinhood account. Before his death, Kearns said he lost hundreds of thousands of dollars on the free-trading app Robinhood.
More than half a year later, Kearns’ parents are suing Robinhood Financial, claiming the free-trading app Robinhood should be held liable for wrongful death, negligent infliction of emotional distress, and unfair business practices. They said that Robinhood’s business practices “directly” led to their son’s death.
In the lawsuit, Dan and Dorothy Kearns also alleged that Robinhood purposely targets young inexperienced customers, then within the app pushes them to engage in highly complex trades. They also added that the Robinhood app did not “meaningful customer support” to resolve their son’s trade issues.
“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 29-page complaint reads.
As we noted back in June, Alex Kearns left a note before his death. In his note, Alex blamed Robinhood for allowing him to take on the risk. Alex also left an ominous message on a small yellow sticky note on his bedroom door asking his parents to turn on the computer. His father, Daniel Kearns, powered up his son’s laptop in their home in Naperville, Ilinois. Within seconds, a four-paragraph letter flashed on the screen. “If you’re reading this, then I am dead,” the note started.
It was less than 24 hours after Alex had checked his account at the wildly popular trading app, Robinhood. In his note, he said he thought he had quickly racked up a negative $730,165 cash balance. But Alex may have misunderstood the Robinhood financial statement, according to a relative.
“All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend,” a Robinhood rep said in a statement, adding that information regarding Kearns’ account could not be made public at this time for privacy reasons.
Below is a screenshot of Alex’s Robinhood account.