In June of 2020, Alex Kearns, a 20-year-old college student, took his own life. Alex had just been informed by the stock-trading app Robinhood that he owed $730,000 after a trade of his had gone wrong. He then received a follow-up message saying that he needed to take immediate action and pay over $170,000 in the next few days. As anyone would when discovering this type of news, Alex began to panic.
Alex reached out to Robinhood’s customer service but was unable to get any response beyond an automated reply that his message had been received and that someone would get back to him once a representative was available. Eventually, the company sent an email to Alex letting him know that he didn’t owe any money after all. Unfortunately, the reply came too late. Alex had committed suicide the day before.
What Is Robinhood?
Robinhood was created as a simple way to get more people involved in investing in the stock market. The app states that its purpose is to democratize the financial system, making the stock market available for everyone. However, critics of the app say that Robinhood is specifically targeting inexperienced users, making investing into a game, and enabling and encouraging risky investments.
Wrongful Death Lawsuit
The family of Alex Kearns has brought a wrongful death lawsuit against Robinhood. The lawsuit accuses the investment app of wrongful death, negligent infliction of emotional distress, and unfair business practices.
While it ultimately remains up to the courts to decide the guilt or innocence of the company in this case, some things are undeniable. Whether or not Robinhood is held fully responsible for the death of Alex Kearns, had they operated their business differently, this young man would not have taken his life.
Approving Inexperienced Traders for Options Trading
One of the biggest questions surrounding the death of Alex Kearns is how he was approved to make such risky trades in the first place. A question he himself asks in a note to his parents before his death. Alex stated that he only believed that he was risking the money he had actually invested in the market. He didn’t think he was exposing himself to going into debt at all, much less going into debt for nearly three-quarters of a million dollars.
One of the questions when signing up to trade options on the app is, “How much investing experience do you have?”. By simply clicking “not much” or any higher level, you will be approved to trade options. If you choose “none”, you will be rejected from trading options. However, the app will then ask if you would like to update your experience level, and you can easily do so and get approved.
The safety checks for the app to protect investors are incredibly lacking. The company claims that they have made revisions to their policies since Alex’s death, to provide more protections and better supports for their investors. Unfortunately, these protections come too late for the Kearns family.
Sending Irresponsible Emails
Another factor that could have protected Alex would have been if the company had not claimed that he owed $730,000 and demanded a payment of more than $170,000 in the next few days. Had Alex not received these messages, he would never have panicked, and there would be no story to tell. Considering that it turned out that he did not owe any money in the end, it was incredibly irresponsible of the company to send these messages.
Even if Alex had not ended up killing himself as a result of his perceived loss, this news would have left him with extreme emotional and mental distress until the company finally responded that there was apparently no problem in the end.
Poor Customer Service
The fact that Alex was not able to get in contact with a customer service representative after receiving news of his impending financial crisis is perhaps the most disturbing part of this story. Even with all of the other things that the company did wrong leading up to this point, Alex still could have been easily saved had he just been able to talk to someone who could help sort things out.
The fact that the company provides no customer service phone number or live chat option made it impossible for Alex to get answers to his questions in a timely manner. Had Robinhood at least had a priority system for its email-based customer service system, they could have escalated Alex’s inquiries and discovered that the messages about his debt had been sent in error soon enough to make a difference.
Corporate Responsibility
The case of Alex Kearns and Robinhood is just one more example of a corporation putting profits before people. Unfortunately, with so many corporate interests wielding influence in our government, corporations continue to get away with behaviors for which an individual would be punished every time.
If you have lost a loved one due to corporate greed, contact a wrongful death lawyer in Florida. Robinhood should be held accountable for their actions. Not only should this be done for Alex and his family, but to ensure that no other kid is hurt by the way the company operates. The same goes for every other corporation out there that conducts its business in a manner that puts people’s lives and wellbeing at risk in order to make a buck.
