Robinhood settles lawsuit over 20-year-old trader who died by suicide
By Matt Egan, CNN Business
Robinhood has settled a wrongful death lawsuit filed by the family of a 20-year-old trader who died by suicide after seeing a negative account balance of $730,000.
The controversial trading app disclosed the settlement on Thursday in its IPO filing. Terms of the agreement were not disclosed.
The family of Alex Kearns, a college student who traded options on Robinhood, accused the startup in a February lawsuit of luring inexperienced investors to take big risks in sophisticated financial instruments without providing the necessary customer support and investment guidance.
Kearns took his own life in June 2020 after mistakenly believing he owed $730,000 and his desperate attempts to get in touch with Robinhood went unanswered, according to his family. The lawsuit accused Robinhood of wrongful death, negligent infliction of emotional stress and unfair business practices.
“This matter was dismissed with prejudice following a settlement between the parties,” Robinhood said in its S-1 filing for its initial public offering.
Court filings indicate the settlement was reached in late May and the case was permanently dismissed on June 21.
Neither Robinhood nor an attorney for the Kearns family immediately responded to requests for comment on the terms of the settlement.
Robinhood executives have previously said they were “devastated” by the tragedy and pointed to efforts made to improve the platform’s options trading, educational efforts and customer service.
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