The family of a 20-year-old student who took his own life after believing he had accumulated large trading losses at Robinhood Markets Inc. filed a lawsuit against the company, saying that “reckless behavior directly and immediately caused the death of one of their victims.”
The father, mother and sister of Alex Kearns, a Robinhood user and a student at the University of Nebraska-Lincoln, said in a lawsuit filed Monday in California state court that Robinhood contributed to his death through “misleading communications” about his investments. and “virtually non-existent” customer service. They are looking for unspecified damages.
“We were devastated by the death of Alex Kearns,” a Robinhood spokesman said in an email. “We remain committed to making Robinhood a place of responsible learning and investment.”
Robinhood was one of the biggest beneficiaries of retail growth during the pandemic blockade, which reached new heights last month with the rage around GameStop Corp. and other actions favored by the RedSit WallStreetBets forum. The company garnered about 20 million users by the end of last year, and executives told investors that Robinhood is planning an initial public offering in the first half of 2021, The Wall Street Journal reported earlier.
But with the rise of Robinhood, the company has sometimes failed to prioritize things like customer service, communications and risk management.