Alexander Kearns Wiki – Alexander Kearns Bio
A 20-year-old Alexander Kearns college student allegedly committed suicide on June 12, 2020 after seeing a negative cash balance of $ 730,000 in his account in the Robinhood stock trading app. His family is currently suing the company for unfair death, negligent emotional distress, and unfair business practices. Alexander Kearns reportedly threw himself in front of an oncoming freight train in Naperville, Illinois.
The University of Nebraska student who started dealing with trade believed that he suffered a huge loss when the application held his trading account on June 11, 2020. The application showed what appeared to be a negative balance of $ 730,000 and said that he had to pay $ 170,000 in the coming days. In Kearns’s case, his account showed a balance of $ 16,000.
Parents sue Robinhood as son, 20, kills himself believing he owed trading app $730K
In an interview with CBS This Morning, Dan and Dorothy Kearns said they believe Robinhood, like their son, is pushing young and inexperienced customers into risky business. In the lawsuit filed by CBS, Kearns said Robinhood did not provide “meaningful customer support” when his sons asked for help on the matter. In the case, Dan and Dorothy say Robinhood “should be held responsible”.
In response to the allegations, a Robinhood spokesperson said: “We do not agree with the allegations in the complaint filed by the Massachusetts Department of Securities and plan to vigorously defend the company.”
The couple said their son came home earlier last year due to the Covid-19 outbreak. His mother, Dorothy, said that her son was interested in investing and opened an account with Robinhood before graduating from high school. According to his family, Alex started investing the money he earned from working as a lifeguard and the funds given to him by his grandfather. In addition to the lawsuit, Alex’s parents also reached out to Robinhood when they saw the negative balance of $ 730,000, saying it must be a mistake. However, after that his account was restricted on June 11 and later that night, the company sent a mail requesting Alex to “act immediately” and pay $ 170,000.
Alex’s parents believed he had “limited exposure,” but they were unaware that Robinhood had approved Alex to buy and sell options with the potential for huge losses. “I don’t understand how they let this happen,” Alex’s father, Dan, told the network. “I lost the love of my life. I miss him more than anything,” Dorothy told CBS. “I can’t tell you how painful it is. It’s the kind of pain that I think a parent is humanly unlikely to handle.”
“He thought he ruined his life. He thought it sucked beyond repair,” Dan told CBS. Robinhood’s customer service didn’t have a phone number, but Alex emailed the support address three times on June 11 and the next day. According to his parents, Alex sought help to figure out what had happened and wanted to see if he could compensate for the losses with another trade. “By mistake, I was allocated more money than I should have, the sales I bought should have paid for the sales I sold. Please can someone look at this?” Alex wrote in an email.
Alex left a heartbreaking suicide note, part of which was posted online by his cousin Bill Brewster. In the suicide note, “How could almost one million dollars of leverage be allocated to a 20-year-old without income?” He wrote. Kearns allegedly wrote. “The sales I bought / sold should have also canceled, but I have no idea what I’m doing right now. I didn’t intend to be assigned so much and take this much risk and just thought I was risking the money I actually had. If you check the app, the margin investment option is mine. It’s not even “open” to it. It’s a painful lesson. To hell with Robinhood. “From Alex’s note, it seemed to be using what is known as the ‘bull-driven spread’, a strategy that limits risk for a trader by buying and selling put options at different strike prices.
Alex received the following automated email from Robinhood: “Thank you for contacting our support team! We wanted you to know that we are trying to get back to you as soon as possible, but we have time to respond. It may be delayed.”
On June 12, 2020, Alex committed suicide. Robinhood sent an automated email the day after he died stating that he had no debt. “Great news! We reach out to verify that you have met your margin call and have lifted your trade restrictions. If you have any questions about your margin call, please feel free to contact us. Gladly Help!” reads e-mail.
At the time of Alex’s death, Robinhood’s co-founders Vlad Tenev and Baiju Bhatt issued a statement saying they were “personally devastated by this tragedy” and promised to “improve Robinhood’s customer experience.” The company plans to make adjustments to its platform around options flows that include multi-leg exercise and assignment. They now have the option to call back from a live agent and add screening for experience in case of more risky transactions. The company donated $ 250,000 to the American Suicide Prevention Foundation after Alex’s devastating death.