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STOCK MARKET NEWS:
Robinhood sued by family of Alex Kearns, 20-year-old trader who killed himself
The Robinhood logo design on a smart device organized in the Brooklyn district of New York City, U.S., on Saturday, Dec. 19, 2020.
Gabby Jones | Bloomberg | Getty Images
Robinhood was sued Monday for wrongful death by the family of Alex Kearns, a 20-year-old consumer who took his life last summertime after thinking he had actually acquired huge losses on the millennial-favored stock trading app.
“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,” stated the grievance submitted by his moms and dads Dan and Dorothy Kearns, and his sibling Sydney Kearns in a California state court in Santa Clara. The family is based in Naperville, Illinois.
Robinhood’s “reckless conduct directly and proximately caused the death of one of its victims,” the grievance stated. The suit is likewise implicating the brokerage of irresponsible infliction of psychological distress and unreasonable company practices.
Alex Kearns, a then-sophomore at the University of Nebraska at Lincoln, devoted suicide in June after believing he had an unfavorable $730,165 money balance on Robinhood.
The grievance declares that Kearns misinterpreted the Robinhood monetary declaration and was safeguarding his family from the monetary commitment.
The fit states that Kearns made 3 efforts to call Robinhood customer care concerning the enormous undersea balance.
Nevertheless, his messages were consulted with automated replies, according to the grievance.
In a note to his family that CNBC has actually seen, Kearns implicated Robinhood of permitting him to overdo excessive danger. He declared the puts he purchased and the shares offered “should have cancelled out,” according to the note.
Puts are alternatives that offer the owner the right to offer a security at a defined cost.
The trader stated he had “no clue” what he was doing, according to the note.
“How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” checked out the note Kearns composed to his family. “There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually owned.”
A Robinhood representative informed CNBC, “We were devastated by Alex Kearns’ death. Since June, we’ve made improvements to our options offering.”
Robinhood has actually ended up being a popular entry indicate the stock market for novice financiers. It has actually grown from 1 million users in 2016 to more than 13 million last spring. In the middle of the Reddit investor-fueled GameStop drama, traffic analysis website SimilarWeb approximates 3 million more users downloaded Robinhood in January alone.
Robinhood, which is run by CEO Vlad Tenev, has actually come under examination for its “gamification” of investing and declared predatory marketing practices.
Robinhood is likewise dealing with class-action suits from customers after the app’s choice to limit trading in particular securities throughout the current GameStop debate. The brokerage company, which has strategies to go public in 2021, has actually consistently stated that the bulk of its users are long-lasting financiers.
Robinhood, one of the greatest recipients of the retail trading boom in 2020, has actually likewise come under examination for the gain access to it provides its customers without appropriate investing education. In 2015, Massachusetts regulators submitted a problem versus Robinhood, implicating the trading app of predatory marketing on unskilled financiers.
The Securities and Exchange Commission charged the brokerage in December with deceptive clients about how the stock-trading app generates income and stopping working to provide the assured finest execution of trades.
The Kearns’ family grievance states, “Not only did Robinhood permit Alex to open the account, but when Alex was a freshman in college later that year, it permitted him to trade options.”
“Worse, Robinhood provided almost no investment guidance, and its customer ‘service’ was virtually non-existent, consisting of automated e-mail replies devoid of any human contact or interaction,” the family declared in the fit.
Here’s Robinhood’s complete declaration concerning the suit.
“We were devastated by Alex Kearns’ death. Since June, we’ve made improvements to our options offering. These include adding the ability to exercise contracts in the app, guidance to help customers through early assignment, updates to how we display buying power, more educational materials on options, and new financial criteria and revised experience requirements for new customers seeking to trade Level 3 options. In early December, we also added live voice support for customers with an open options position or recent expiration, and plan to expand to other use cases. We also changed our protocol to escalate customers who email us for help with exercise and early assignment. We remain committed to making Robinhood a place to learn and invest responsibly.”
— with reporting from CNBC’s Dan Mangan, Kate Rooney and Yasmin Khorram.
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The Robinhood logo design on a smart device organized in the Brooklyn district of New York City, U.S., on Saturday, Dec. 19, 2020.
Gabby Jones | Bloomberg | Getty Images
Robinhood was sued Monday for wrongful death by the family of Alex Kearns, a 20-year-old consumer who took his life last summertime after thinking he had actually acquired huge losses on the millennial-favored stock trading app.
“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,” stated the grievance submitted by his moms and dads Dan and Dorothy Kearns, and his sibling Sydney Kearns in a California state court in Santa Clara. The family is based in Naperville, Illinois.
Robinhood’s “reckless conduct directly and proximately caused the death of one of its victims,” the grievance stated. The suit is likewise implicating the brokerage of irresponsible infliction of psychological distress and unreasonable company practices.
Alex Kearns, a then-sophomore at the University of Nebraska at Lincoln, devoted suicide in June after believing he had an unfavorable $730,165 money balance on Robinhood.
The grievance declares that Kearns misinterpreted the Robinhood monetary declaration and was safeguarding his family from the monetary commitment.
The fit states that Kearns made 3 efforts to call Robinhood customer care concerning the enormous undersea balance.
Nevertheless, his messages were consulted with automated replies, according to the grievance.
In a note to his family that CNBC has actually seen, Kearns implicated Robinhood of permitting him to overdo excessive danger. He declared the puts he purchased and the shares offered “should have cancelled out,” according to the note.
Puts are alternatives that offer the owner the right to offer a security at a defined cost.
The trader stated he had “no clue” what he was doing, according to the note.
“How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” checked out the note Kearns composed to his family. “There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually owned.”
A Robinhood representative informed CNBC, “We were devastated by Alex Kearns’ death. Since June, we’ve made improvements to our options offering.”
Robinhood has actually ended up being a popular entry indicate the stock market for novice financiers. It has actually grown from 1 million users in 2016 to more than 13 million last spring. In the middle of the Reddit investor-fueled GameStop drama, traffic analysis website SimilarWeb approximates 3 million more users downloaded Robinhood in January alone.
Robinhood, which is run by CEO Vlad Tenev, has actually come under examination for its “gamification” of investing and declared predatory marketing practices.
Robinhood is likewise dealing with class-action suits from customers after the app’s choice to limit trading in particular securities throughout the current GameStop debate. The brokerage company, which has strategies to go public in 2021, has actually consistently stated that the bulk of its users are long-lasting financiers.
Robinhood, one of the greatest recipients of the retail trading boom in 2020, has actually likewise come under examination for the gain access to it provides its customers without appropriate investing education. In 2015, Massachusetts regulators submitted a problem versus Robinhood, implicating the trading app of predatory marketing on unskilled financiers.
The Securities and Exchange Commission charged the brokerage in December with deceptive clients about how the stock-trading app generates income and stopping working to provide the assured finest execution of trades.
The Kearns’ family grievance states, “Not only did Robinhood permit Alex to open the account, but when Alex was a freshman in college later that year, it permitted him to trade options.”
“Worse, Robinhood provided almost no investment guidance, and its customer ‘service’ was virtually non-existent, consisting of automated e-mail replies devoid of any human contact or interaction,” the family declared in the fit.
Here’s Robinhood’s complete declaration concerning the suit.
“We were devastated by Alex Kearns’ death. Since June, we’ve made improvements to our options offering. These include adding the ability to exercise contracts in the app, guidance to help customers through early assignment, updates to how we display buying power, more educational materials on options, and new financial criteria and revised experience requirements for new customers seeking to trade Level 3 options. In early December, we also added live voice support for customers with an open options position or recent expiration, and plan to expand to other use cases. We also changed our protocol to escalate customers who email us for help with exercise and early assignment. We remain committed to making Robinhood a place to learn and invest responsibly.”
— with reporting from CNBC’s Dan Mangan, Kate Rooney and Yasmin Khorram.
Sign Up For CNBC PRO for unique insights and analysis, and live company day shows from worldwide.
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question, you know it's been at least
15 years since I've been following the news, no 10 my folks do that, hmm. what was the question again !?
where you read about this ?
of course I can, it was here
on U-S-NEWS.COM
