Relatives of Robinhood user who died by suicide sues firm

The loved ones of a 20-yr-old consumer of the inventory investing app Robinhood sued the enterprise Monday, alleging that its “aggressive tactics” and focusing on of youthful, inexperienced buyers led to the user’s loss of life by suicide previous yr.

In a 30-site criticism filed in California’s Santa Clara County Superior Court docket, the family members of Alex Kearns cited his very last acknowledged penned phrases — “How was a 20-year-outdated with no revenue able to get assigned nearly $1 million truly worth of leverage?” — and explained the Silicon Valley-centered company lures users like Kearns into taking major hazards with the promise of big earnings.

“Though Alex was basically a senior in significant faculty when he opened an account with Robinhood and had small or no money, Robinhood identified he was experienced ample to enter into the earth of buying and selling complex financial alternatives,” the doc states.

The subsequent calendar year, although Kearns was a freshman at the College of Nebraska at Lincoln, he began trading selections by means of the application.

In June 2020, Kearns was notified by the company that his account mirrored a destructive equilibrium of $730,000, the criticism claims. An email from the firm cited in the files say he was required to deposit roughly $178,000 a week afterwards.

The grievance claims that Kearns didn’t in fact owe the funds, mainly because his losses would have been coated by choices held in his account. But Kearns believed his relatives would get caught with his bill, the grievance states, and Robinhood didn’t react to his “increasingly desperate pleas for help” — e-mails that were satisfied with auto-replies.

Kearns died on June 12. The go well with, which alleges wrongful dying, unfair small business practices and negligent infliction of psychological distress, does not specify damages.

In a statement, a Robinhood spokeswoman mentioned the firm was a “devastated” by Kearns’ dying and said it had made a collection of enhancements to the app considering the fact that June, which includes permitting consumers to physical exercise contracts and supplying extra direction and schooling. The firm also added live assistance for some buyers.

The accommodate comes two months soon after regulators in Massachusetts accused Robinhood of predatory internet marketing — a characterization the business has claimed it rejects — and weeks immediately after a stock market frenzy involving Robinhood and people of a Reddit concept board.