A 20-year-old college student killed himself after seeing a negative $730,000 balance in his Robinhood account, his family says

Rafael Henrique/SOPA Images/LightRocket via Getty ImagesRobinhood pioneered free stock trading and sparked a race among traditional online brokers to offer commission-free trades.
  • A Robinhood trader died by suicide last Friday following a mishap on the free stock-trading app, his family said.
  • Alexander Kearns, 20, apparently saw a massive negative cash balance while trading options contracts.
  • His family said they wanted answers from Robinhood about how this happened and how it can prevent incidents like this in the future.
  • Robinhood said it had reached out to the family and was “committed to continuously improving” its platform.
  • Visit Business Insider’s homepage for more stories.

A 20-year-old University of Nebraska student took his own life after his Robinhood account showed a massive negative balance, his family said, adding that they wanted answers from the popular free stock-trading app.

Alexander Kearns died by suicide last Friday. Bill Brewster, a relative and representative for the family, confirmed Kearns’ death to Business Insider.

Forbes first reported on the death; it linked to a tweet from Brewster with a screenshot showing a negative $US730,000 cash balance in Kearns’ account. In an interview, Brewster confirmed the balance, which does not reflect a user’s portfolio value or debt owed. The balance was likely due to complex options trades, which can settle over concurrent trading days, leaving a temporary balance during the interim.

Suicide is complex, and the reasons behind a suicide are not always immediately clear. Risk factors include mental illness or a history of trauma, and many people considering suicide exhibit warning signs. Treatment is available to help people overcome suicidal thoughts and better cope.

Brewster, a financial analyst, said Kearns had left a note asking why someone so young was able to receive so much margin, or a loan against which investors can purchase stocks and options.

A Robinhood representative told Business Insider that it would not share any details about the account, citing privacy concerns.

“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,” the company said.

Brewster commended the company for reaching out and offering a “senior-level” employee for conversation. However, he said he also wanted to know how the balance was displayed in the first place and how Robinhood plans to prevent similar incidents in the future.

“This story has to be told, and they need to answer the questions,” he told Business Insider. “They’re asking millennials to trust them with their savings, and they’re turning it into, in my opinion, into a game. They’re not thinking about basic design flaws – anyone who cares about financial responsibility to anyone wouldn’t put a negative cash balance in front of somebody without some sort of warning or reasonable customer support.”

Robinhood, one of the first companies to make commission-free stock trading commonplace, is worth more than $US8 billion following its latest round of funding. Qualified users can apply in the app to trade options contracts, inherently risky investments that give buyers the right, but not the obligation, to buy or sell a stock at a certain price within a certain period.

“We are committed to continuously improving our platform and are reviewing our options offering to determine if any changes may be appropriate,” Robinhood said.

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