Famed trading app Robinhood is being sued by a family of a 20-year-old boy who reportedly committed suicide last summer after he was convinced, he had lost $730,000 in the market.
Image of Alex Kearns provided by Kearns Family
The family of victim, Alex Kearns, are alleging wrongful death, negligent infliction of emotional distress, and unfair business practices. Ultimately, suing the app for “misleading communications”, according to VICE news.
Robinhood has seen its share of the spotlight in more recent times in lieu of the unexpected rise and fall of the Reddit backed GameStop stock. This time the app is under a different kind of limelight.
In a statement from the lawsuit, Kearns was unable to reach anyone at Robinhood after he selected trade options that allowed him to buy up to $700,000 in shares. The tremendous selection caused the app to restrict his account, asking him to pay over $178,000 within a week’s period to neutralize the trade.
Paralyzed with the thought that his family would have to cover the $178,000 they did not possess; Alex rode his bike in front of a train. Unbeknownst to Alex, his father Dan, said he had potentially $5,000 in his savings to help alleviate some of the financial burden. A price far too trivial compared to the life of his son.
To the Kearns family this goes beyond a cautionary tale of investing in a risky stock market. They want companies like Robinhood to be more cognizant of the clientele who are drawn to them, the young and inexperienced.
Rightfully so, is the responsibility of these apps to create clear guidelines, boundaries, and most importantly explanation of how the stock market works.
In the wake of the surge of the Reddit stock craze is the influx of more people like Alex. Individuals who are curious and blindly hopeful of grabbing an unforgiving market by the reins.