- Robinhood has settled a wrongful death lawsuit over the suicide of a 20-year-old trader last June.
- Alex Kearns killed himself after thinking he lost $730,000 on the stock-trading app.
- Robinhood disclosed the settlement in its S-1 filing on Thursday. Terms were not disclosed.
Robinhood has settled a wrongful death lawsuit over the suicide of a college student who killed himself thinking he lost $730,000 on the app.
The company said in its public filing for an IPO on Thursday that the lawsuit was “dismissed with prejudice following a settlement between the parties.” The terms of the settlement were not disclosed in the S-1 filing.
Twenty-year-old Alex Kearns killed himself last June after seeing a negative balance of $730,000 in his account on the stock-trading app. However, the balance did not reflect the portfolio’s value or debt owed. It likely came from complex options trades, which can leave temporary balances while they settle over multiple days.
Before his death, Kearns emailed Robinhood asking for help after seeing his balance, according to CBS News.
“I was incorrectly assigned more money than I should have, my bought puts should have covered the puts I sold. Could someone please look into this?” he wrote.
Robinhood replied with an automated message saying the company would get back to him but their response could be delayed, CBS reports.
The company issued a statement addressing Kearns’ death last June.
“All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend,” Robinhood said at the time. “We are committed to continuously improving our platform and are reviewing our options offering to determine if any changes may be appropriate.”
Kearns’ parents filed the wrongful death suit in February. Robinhood’s S-1 says the lawsuit “asserted claims for wrongful death, negligent infliction of emotional distress and unfair business practices under a California statute, and sought damages and other relief.” Kearns’ parents reportedly said the app targets young people and encourages them to take part in risky trading.
“I’m sorry to the family of Mr. Kearns for your loss,” he said. “The passing of Mr. Kearns was deeply troubling to me and to the entire company.”