Published , by Donovan Erskine
Published , by Donovan Erskine
Robinhood found itself in the center of controversy following the movement to buy up GameStop (GME) shares and skyrocket the stocks value, as the company began to restrict users’ ability to buy and sell. Now, the company is facing a lawsuit, though for a different situation. The family of a Robinhood user is suing the trading company, after the relative committed suicide last year, believing that he had lost a large sum of money on the app.
This story comes via CNBC. Last Summer, Robinhood user Alex Kearns took his own life after believing he had amassed major losses through the trading app. Now, Kearns’ family is taking legal action against Robinhood, citing the company’s business practices as one of the factors that lead to Kearns’ death.
“This case centers on Robinhood’s aggressive tactics and strategy to lure inexperienced and unsophisticated investors, including Alex, to take big risks with the lure of tantalizing profits,” the complaint filed by Kearns’ family states. As the ongoing situation with GameStop (GME) has taught many, things can flip overnight, and there’s always a serious risk when going all-in on a stock. With all of the scrutiny Robinhood is currently facing, Kearns’ family might have a case.
The complaint also states that the trading company’s “reckless conduct directly and proximately caused the death of one of its victims.” According to the filing, Kearns believed that he was $700,000 in the hole. He attempted to contact Robinhood support a few times, but was hit with automated responses each time. In a note to his family, Kearns stated that he had “no clue” what he was doing. In the complaint, the family says that Kearns was trying to protect them from financial obligation.
It’s a devastatingly tragic story, and one of several that Robinhood will have to answer for in court.