A Massachusetts couple who lost their 20-year-old son to suicide last year have sued stock trading app Robinhood after they said the company's business practices let the young man make more risky trades than he should have, provided confusing information that appeared to show a massive loss, and did not provide adequate support when he reached out for help.
Dan and Dorothy Kearns have accused Robinhood of wrongful death, negligent infliction of emotional distress, and unfair business practices. They say Robinhood targets people who are young and have little trading experience and lets them engage in options trading, bringing the possibility for enormous financial loss.
The Kearns's son Alex Kearns sought help after his Robinhood account showed a loss of about $730,000. He sent multiple emails to Robinhood customer service asking questions about the amount. His only immediate response was an automated email. Robinhood did not provide a phone number for customers to call with questions, but did send Alex Kearns an overnight email demanding $170,000 in payment in a short amount of time.
"He thought he blew up his life," Dan Kearns told CBS News. "He thought he screwed up beyond repair."
The couple learned the next day that Alex Kearns had taken his own life. He left a suicide note discussing his trades on Robinhood. The day after the suicide, Robinhood emailed Alex Kearns saying the matter had been resolved and his account was no longer restricted. Kearns family attorneys say Alex Kearns may have lost no money at all, because of the structure of his trades.
Massachusetts Secretary of the Commonwealth William Galvin says platforms like Robinhood need more regulation and that some Robinhood app features make trading seem like a game.
"I think it demands some sort of national standard for this behavior," he said. "There was a very deliberate effort on the part of Robinhood to particularly entice younger, inexperienced investors."
Galvin's office filed a complaint against Robinhood in December.
"We disagree with the allegations in the complaint by the Massachusetts Securities Division and intend to defend the company vigorously," a company spokesperson said.