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The co-founders of the Robinhood trading app said the company is making changes to its “customer experience” and donating $250,000 to suicide prevention after a college student killed himself after the app showed he had a negative balance down $730,000 from trading options.
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Alex Kearns, 20, died by suicide as a result of the “emotional stress” from the exposure, according to Bill Brewster, a family member who works in finance. Kearns had believed he had “no margin” selected on his Robinhood account, according to Brewster.
“How does a 20-year-old with no income get access to that kind of leverage/exposure?” Brewster asked in a tweet.
Kearns may not have even been in debt for all that money, Forbes reported. The negative balance shown on the app may have been the temporary result of stocks tied to his options which had not yet landed in his account.
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Vlad Tenev and Baiju Bhatt, co-founders and Co-CEOs of Robinhood, said in a blog post this week that they were “personally devastated by this tragedy.” They said the company was donating to the American Foundation for Suicide Prevention and urged anyone in crisis to call the National Suicide Prevention Lifeline at 800-273-8255 or text TALK to 741741.
The co-CEOS said Robinhood’s team was considering several changes in response to Kearn’s death, including adding new criteria for customers looking to trade options and expanded educational resources about options trading.
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The company is also rolling out improvements to its in-app messaging and emails, Tenev and Bhatt said. It’s also looking to improve the user interface to better show buying power and the mechanics of options assignments.
“These changes will take a bit of time to roll out, but our teams are hard at work,” they wrote in the post.
