Family Sues Robinhood After Stock Trader Kills Himself Mistakenly Believing He Lost $700K
SANTA CLARA (CBS SF/AP) - A family has filed a lawsuit against Robinhood Financial claiming the company's practices led to their son's suicide because he mistakenly believed he lost $700,000.
The lawsuit was filed by the parents and sister of Alex Kearns in Santa Clara County and charges the stock-trading company with wrongful death, negligent infliction of emotional distress and unfair business practices.
The family claims that last June, Robinhood led Kearns to believe he lost $730,000 in a stock-options trade, when in fact, he did not. After a series of late-night auto-reply emails and a demand for $178,000 within 7 days, the 20-year-old college student became emotionally distressed and took his own life.
According to the lawsuit, Kearns was no match to Robinhood's "aggressive tactics and strategy to lure inexperienced and unsophisticated investors, including Alex, to take big risks with the lure of tantalizing profits."
Robinhood, in a statement on Monday, said it was devastated by Kearns death and has since added live voice support for customers like him.
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The Menlo Park-based company recently made headlines when it temporarily restricted purchases of several stocks including Game Stop, after a group of investors on Reddit set off a buying frenzy on Wall Street that crippled short sellers.
© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.
