Robinhood has another court case on its hands after the family of 20-year-old Alex Kearns sues following his suicide last year, claiming it was caused by an app error showing he owed almost a million dollars when he really didn’t.
The stock trading app Robinhood has been in the hot seat for the past few weeks and almost all the anger and pressure being applied is self-inflicted. Last week, Robinhood halted trading on stocks, targeting Reddit group Wallstreetbets and said they were “protecting the users,” which no one believed. The CEO even went on TV with Chris Cuomo to tell the same lie and Chris called his bluff immediately, blaming the decision on liquidity issues.
Of course, it was a liquidity issue, and they would later admit on Clubhouse that they couldn’t cover the cost needed to continue the trading. Now, in the midst of this dark time, an old issue caused by Robinhood has resurfaced. Last year, 20-year-old Alex Kearns committed suicide after his Robinhood app showed he was negative $730,000. The whole situation is sad but was made even more tragic when it was revealed he didn’t even owe that amount and it was simply an error in the app on Robinhood’s behalf, allegedly.
According to reports from TMZ, the parents of Alex are seeking justice and want Robinhood to be held accountable.
In the lawsuit, obtained by TMZ, Alex’s parents claim he killed himself one day after Robinhood posted a notice restricting his account showing he was in the hole a whopping $730k and told him he needed to come up with around $170k ASAP.
Alex’s parents claim the initial notice was misleading and inaccurate, and they say Alex was shocked at what he owed and tried to contact Robinhood for clarification, but all he got was a boilerplate email response.
After no help from Robinhood, Alex committed suicide by stepping in front of an oncoming train and just days later, Robinhood would email him stating he didn’t owe the six figures he thought he did. In his suicide letter, he questioned how Robinhood let him have a million dollars worth of leverage at only 20 years old.
His family is suing the app not only for wrongful death but also over their unfair business practices. In a statement, Robinhood admits they’ve made numerous changes as a result of Alex’s passing and will keep making changes to become better. After the events of the past few weeks, the future is looking shaky for Robinhood, who even postponed their own stock market IPO.