Robinhood settles lawsuit over 20-year-old trader who committed suicide thinking he owed $730,000 mazech.com

Alexander Kearns. Photo: CNN

Robinhood has settled a wrongful death lawsuit filed by the family of a 20-year-old trader who killed himself last summer after mistakenly believing he owed $730,000 to the online broker.

Alexander Kearns,20, was trading on June 11 last year using the Robinhood app when the app suddenly put a hold on his account and showed a negative balance of $730,000 and that he needed to pay over $170,000 in the coming days.

“He thought he blew up his life,” Kearns’ dad, Dan Kearns, said in an interview with CBS last year. “He thought he screwed up beyond repair.”

Kearns, a University of Nebraska student reportedly jumped in front of an approaching freight train on June 12 after leaving a suicide note detailing his predicament at finding the negative balance.

“How was a 20-year-old with no income able to get assigned almost a million dollars worth of leverage?”, the suicide note read.

Alex Kearns had been trading options, rather than stocks, so the negative balance was probably a temporary amount that showed until the options settled to his account, according to the report.

Kearns’ parents filed a wrongful death lawsuit last year, accusing Robinhood of negligent infliction of emotional distress and unfair business practices. They accused Robinhood of targeting young and inexperienced customers, then pushed them to engage in risky trading practices. And when those investors needed help — as Alex Kearns did the day he died — Robinhood provided no “meaningful customer support,” the suit says.

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