Robinhood sued by family of Naperville man who died by suicide believing he lost over $700K
NAPERVILLE, Ill. (WLS) -- The family of a Naperville man is suing Robinhood after he died by suicide after believing he lost more than $700,000 on the stock trading app.
Attorneys for the family say 20-year-old Alex Kearns connected the app to his death in his suicide note.
"He actually saved the screenshot, attached it to his suicide note; it showed a negative cash balance of $730,000," said Ethan Brown, one of the family's attorneys.
The Kearns family is now suing the app, demanding to know how the college student was able to get assigned almost $1 million worth of leverage.
"In this case, you have a 20-year-old man who has no job, he is living at home and has a grand total of about $16,000 to trade options, which are very complicated," Brown said.
According to the lawsuit, Kearns received an email that led him to believe he suffered a massive loss. The lawsuit claims Kearns' account was restricted, and his family said the 20-year-old panicked.
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The lawsuit alleges communications from Robinhood were misleading.
"The communication suggested that he owed $730,000, and also that he was going to have to make a margin call within a matter of days, having to come up with $178,000 cash," said Brown.
According to court documents, Kearns tried to contact Robinhood customer service and received an automated reply.
"One of the great tragedies of this is that we do not think he owed anything at all," Brown said.
Robinhood responded in a statement, saying in part, "We are devastated by Alex Kearns' death. Since June we've made improvements to our options offering. In early December, we also added live voice support for customers with an open options position or recent expiration, and plan to expand to other use cases. We also changed our protocol to escalate customers who email us for help with exercise and early assignment. We remain committed to making Robinhood a place to learn and invest responsibly."
The Kearns family said Robinhood lured inexperienced investors like Alex to take big risks. Now they're pushing for more changes to protect others.
"They do not want any other family to have a tragic situation like they had," Brown said.
