The family of Alex Kearns, who killed himself last year, have filed a lawsuit against trading app Robinhood over his death.
The lawsuit, first reported by CBS News, said the 20-year-old mistakenly believed he owed $730,000 when he took his own life.
Alex’s parents, Dan and Dorothy Kearns, say their son was unable to get help or support from customer services before he died.
Robinhood, which allows anyone to buy and trade stocks, says on its website that it is “on a mission to democratize finance” and is currently running an advertising campaign under the slogan of “We are all investors”.
The app recently made headlines for limiting sales of some shares to users after US retailer GameStop saw its stock surge.
Speaking to CBS, the parents of Alex Kearns say he began using Robinhood just before he graduated high school.
Dan and Dorothy Kearns say they did not know the app had also approved him to buy and sell options – a risky financial instrument – despite a lack of financial experience.
They say their son realized on June 11, 2020, that his account had been restricted by Robinhood amid what appeared to be a negative balance of more than $700,000 on his account.
CBS reports Alex Kearns received an automated email at 03:26 early the next morning asking him to take “immediate action” to pay more than $170,000 within days.
The family say the student emailed customer service several times asking for support and help understanding the figures on his trading account, but only received stock response messages saying they would get back to him.
“They provide no mechanism through a telephone call, through live email service, to get live answers to questions,” a lawyer for the family told CBS.
Alex’s parents were told by police later that day, on June 12, that their son had died.
“He thought he blew up his life. He thought he screwed up beyond repair,” Dan Kearns said in the interview, in which he said his son had “just needed a little help”.
Dan and Dorothy Kearns say an email from Robinhood, received the day after his death, clarified that trading restrictions had been lifted and the trade resolved.
The lawsuit, filed in California state court, said the loss had been covered by other options in Alex’s account and accuses Robinhood’s “misleading communications” of leading to “panic and confusion”.
According to media reports, the wrongful death lawsuit accuses Robinhood of unfair business practices and negligent infliction of emotional distress.
If you’re in an emergency, please call 911. You can contact the US National Suicide Prevention Lifeline on 1-800-273-8255 or the Crisis Text Line by texting HOME to 741741.