20 year old investor commits suicide after misreading his balance In account

[InRareForm]

https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/

Sad

[SpursforSix]

https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/

Sad

It's sad but if he would have spent any time 1) understand the trading mechanism and more importantly 2) asked someone else or call the brokerage firm, this could have been avoided.
Obviously, he shouldn't have been trading at all if he didn't have the fundamental understanding of what he was doing. My guess is that when he filled out the qualification boxes to have a margin account, he might have lied about his net worth, income, and/or experience.

[Chucho]

https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/

Sad

Glanced thru it, seems he killed himself before he even tried to verify the accuracy of the statement. Not to sound crude, but that's Darwinism.

[SpursforSix]

Glanced thru it, seems he killed himself before he even tried to verify the accuracy of the statement. Not to sound crude, but that's Darwinism.

That's exactly what happened.

Also, if that happened to me, I'd first call and see what was up. And if they told me I actually owed $750,000, I'd tell them good luck in getting me to pay it.

[InRareForm]

Yeah or just file bankruptcy and wait 10 years tonstart over

[Millennial_Messiah]

That's exactly what happened.

Also, if that happened to me, I'd first call and see what was up. And if they told me I actually owed $750,000, I'd tell them good luck in getting me to pay it.

No shit. No debtors prison in the US. They can only send collections letters and then you move and don't give them your new address. Your credit stinks for 7 years but you don't have to actually pay back a red cent.

What a dumbass

[Millennial_Messiah]

Yeah or just file bankruptcy and wait 10 years tonstart over

bankruptcies can last 7 years or a lifetime depending on the lender

better to just have a defaulted collection tbh. Of course you can't do that on student loans but pretty much everything else.

[Chucho]

bankruptcies can last 7 years or a lifetime depending on the lender

better to just have a defaulted collection tbh. Of course you can't do that on student loans but pretty much everything else.


Andy...do you know what bankruptcy is?

[Millennial_Messiah]

Andy...do you know what bankruptcy is?

I was pretty damn close in like March 2018.

[DC23]

Very sad story but not the kid's fault. Massive lawsuit coming for Robinhood and SEC.

[DC23]

My guess is that when he filled out the qualification boxes to have a margin account, he might have lied about his net worth, income, and/or experience.

Irrelevant. Robinhood failed to complete basis due diligence and did not abide by Know Your Customer Rule 2090. Sad story for the kid, major class action lawsuit coming for Robinhood and the SEC. The fact of the matter is this would never happen at a reputable brokerage firm like Schwab, Ameriprise, etc.

[Spurtacular]

Yea, I saw this.
The article I scanned said he thought he owed $700K.
Though it noted it excluded possible returns not showing up yet.
What was the actual amount?

[Spurtacular]

Yeah or just file bankruptcy and wait 10 years tonstart over

I thought it was seven but could be more depending on situations.
But yea; that's what I'd have advised.

[InRareForm]

Yea, I saw this.
The article I scanned said he thought he owed $700K.
Though it noted it excluded possible returns not showing up yet.
What was the actual amount?

I have read comments that the difference would have been maybe $500-2000 range

[Spurtacular]

I have read comments that the difference would have been maybe $500-2000 range

So, negligible.

[ElNono]

The whole gamification of the stock market is dangerous, and companies like this one are out there trying to prey on young children, tbh...

The SEC should really clamp down on companies that make stock trading look like video games... this has real life ramifications.

[Spurtacular]

The whole gamification of the stock market is dangerous, and companies like this one are out there trying to prey on young children, tbh...

The SEC should really clamp down on companies that make stock trading look like video games... this has real life ramifications.

I don't mind the discussion; but this guy was 20, not 16. Also, I suspect the parenting is not up to par here. That's the bigger issue, imo.

[SpursforSix]

Irrelevant. Robinhood failed to complete basis due diligence and did not abide by Know Your Customer Rule 2090. Sad story for the kid, major class action lawsuit coming for Robinhood and the SEC. The fact of the matter is this would never happen at a reputable brokerage firm like Schwab, Ameriprise, etc.

You’re wrong about that to a large degree. In the past I’ve opened up margin/options/futures accounts without meeting the requirements. I don’t think any of them tried to validate anything. It shouldn’t be up to the broker to police a 20 year old who lying on his form.

[paperboy77]

Very sad story but not the kid's fault. Massive lawsuit coming for Robinhood and SEC.

The the kids fault? Feel bad for anyone that dies but the 20 yr old "kid" shoulda informed himself.

[Spurtacular]

You’re wrong about that to a large degree. In the past I’ve opened up margin/options/futures accounts without meeting the requirements. I don’t think any of them tried to validate anything. It shouldn’t be up to the broker to police a 20 year old who lying on his form.

I agree. Robinhood actually gave the dude a generous opportunity to get rich FFS.

[ElNono]

I don't mind the discussion; but this guy was 20, not 16. Also, I suspect the parenting is not up to par here. That's the bigger issue, imo.

Don't completely disagree with this. But it's a separate matter from appealing to the uneducated through gamification.

[Spurtacular]

Don't completely disagree with this. But it's a separate matter from appealing to the uneducated through gamification.

Fair enough. It is a separate issue.

Gamification? I don't understand what you mean by that.

Sure, there's ease of use for the app if that's what you mean. I question their extension of options credit regardless of "gamification".

[ElNono]

Fair enough. It is a separate issue.

Gamification? I don't understand what you mean by that.

Sure, there's ease of use for the app if that's what you mean. I question their extension of options credit regardless of "gamification".

Making things seem like it's just a videogame to appeal to young kids, when it's real money, real people... gambling has been doing the same thing for a while now, and they've also been put on notice.

Just read this update too:

Robinhood Changes Trading App After 20-Year-Old's Suicide

Friday Robinhood announced it was making a $250,000 donation (https://www.cnbc.com/2020/06/19/robinhood-increases-guardrails-on-options-trading-in-the-wake-of-a-customer-suicide.html) to the American Foundation for Suicide Prevention, expanding its educational content about options trading (https://blog.robinhood.com/news/2020/6/19/commitments-to-improving-our-options-offering), and rolling out changes to its in-app messages about multi-leg options spreads. And of course, they also announced that they're "working on changes to our user interface, including the way buying power is displayed.

"These changes will take a bit of time to roll out, but our teams are hard at work."

[Spurtacular]

Making things seem like it's just a videogame to appeal to young kids, when it's real money, real people... gambling has been doing the same thing for a while now, and they've also been put on notice.

Just read this update too:

Robinhood Changes Trading App After 20-Year-Old's Suicide

Friday Robinhood announced it was making a $250,000 donation (https://www.cnbc.com/2020/06/19/robinhood-increases-guardrails-on-options-trading-in-the-wake-of-a-customer-suicide.html) to the American Foundation for Suicide Prevention, expanding its educational content about options trading (https://blog.robinhood.com/news/2020/6/19/commitments-to-improving-our-options-offering), and rolling out changes to its in-app messages about multi-leg options spreads. And of course, they also announced that they're "working on changes to our user interface, including the way buying power is displayed.

"These changes will take a bit of time to roll out, but our teams are hard at work."

Again, that's not really the issue. If a kid has $91 to invest and he loses it, then so what. If he makes money, nobody is certainly complaining. And if he has more money than that, then I'm okay with that too. Learn about life earlier. I also imagine Robinhood already has parental consent waivers as well. But if it doesn't, then that's good CYA to get. Frankly, the interface is not the issue. They could gamify it up all they want as far as I'm concerned. As long as they're following SEC rules, I don't see the problem.

If there is any liability issue, it's with options and minors; but again this guy was not a minor. This is bad optics for them though; and is a big financial loss too for that matter. So, out of their own self interest I should think they'll be reviewing how they do those going forward.

[ElNono]

Again, that's not really the issue. If a kid has $91 to invest and he loses it, then so what. If he makes money, nobody is certainly complaining. And if he has more money than that, then I'm okay with that too. Learn about life earlier. I also imagine Robinhood already has parental consent waivers as well. But if it doesn't, then that's good CYA to get. Frankly, the interface is not the issue. They could gamify it up all they want as far as I'm concerned. As long as they're following SEC rules, I don't see the problem.

If there is any liability issue, it's with options and minors; but again this guy was not a minor. This is bad optics for them though; and is a big financial loss too for that matter. So, out of their own self interest I should think they'll be reviewing how they do those going forward.

I think there could be a number of liability issues, like false advertising, etc.

Like I said, I don't completely disagree with the notion that, at the end of the day, you can't protect stupid from himself/herself. However, I do think there's some smoke and mirrors to try to prey on these people.

[Spurtacular]

I think there could be a number of liability issues, like false advertising, etc.

Like I said, I don't completely disagree with the notion that, at the end of the day, you can't protect stupid from himself/herself. However, I do think there's some smoke and mirrors to try to prey on these people.

False advertising how?

[ElNono]

False advertising how?

Depends how they advertise their platform. I'm not privy on Robinhood specifically, but I do know some gambling companies got caught red handed by advertising free this, free that, this is a game, have fun, then bait and switching into subscription fees, etc.

Some of that was also going on with paid loot boxes in videogames. I know the some EU countries clamped down on that, some outright outlawed it.

[Spurtacular]

Depends how they advertise their platform. I'm not privy on Robinhood specifically, but I do know some gambling companies got caught red handed by advertising free this, free that, this is a game, have fun, then bait and switching into subscription fees, etc.

Some of that was also going on with paid loot boxes in videogames. I know the some EU countries clamped down on that, some outright outlawed it.

Their basic trading services are free. Options is probably a part of Robinhood Gold or whatever. I would think they have various disclaimers for investors taking it to that level; but they are known for taking more shortcuts or being less thorough than the more established brokerages.

On a side note: I'm happy Robinhood came along; their business model forced the others to go commission free. Less barriers to trading is good from my perspective.

[ElNono]

Their basic trading services are free. Options is probably a part of Robinhood Gold or whatever. I would think they have various disclaimers for investors taking it to that level; but they are known for taking more shortcuts or being less thorough than the more established brokerages.

On a side note: I'm happy Robinhood came along; their business model forced the others to go commission free. Less barriers to trading is good from my perspective.

I'm not against it, but they're not completely free. There's always fees, and sometimes they're in very fine print. And frankly, the stock market is nothing like it used to be. It's all short term, high speed and algorithmic trading, etc. I mean, you can still make money going long or with certain stocks, but in this day and age, prince from arabia farts, and you get some swings. IMO, it lost it's original purpose, which was primarily to fund long term growth in companies. That's all in venture capital now.

[Spurtacular]

I'm not against it, but they're not completely free. There's always fees, and sometimes they're in very fine print. And frankly, the stock market is nothing like it used to be. It's all short term, high speed and algorithmic trading, etc. I mean, you can still make money going long or with certain stocks, but in this day and age, prince from arabia farts, and you get some swings. IMO, it lost it's original purpose, which was primarily to fund long term growth in companies. That's all in venture capital now.

Stocks may have evolved or devolved based on one's perspective. But I think they do serve to create a needed equity backing in the world. Good for short, long, or dividend investors. My pet peeve is companies just making up stock like the govt. prints money and giving them to execs as "bonuses". To me, that practice needs to be shut down. But since it helps the elites who basically make and enforce the rules, I doubt that's going to happen.

[ElNono]

Stocks may have evolved or devolved based on one's perspective. But I think they do serve to create a needed equity backing in the world. Good for short, long, or dividend investors. My pet peeve is companies just making up stock like the govt. prints money and giving them to execs as "bonuses". To me, that practice needs to be shut down. But since it helps the elites who basically make and enforce the rules, I doubt that's going to happen.

At the end of the day, it's all fiat money

[Spurtacular]

At the end of the day, it's all fiat money

Money for nothing and the chicks for free.

[ElNono]

Money for nothing and the chicks for free.

great song, tbh

[SpursforSix]

I’d like to hear exactly what he traded. In the quote above, Robin Hood is making changes to their multi-leg options spread. If that was what he was doing, it would seem like he had more than a passing interest. To end up with a negative amount, it seems like he would have had to have a margin account as well. I don’t think this is a case of some uneducated dude just making one unlucky trade.

[ElNono]

I’d like to hear exactly what he traded. In the quote above, Robin Hood is making changes to their multi-leg options spread. If that was what he was doing, it would seem like he had more than a passing interest. To end up with a negative amount, it seems like he would have had to have a margin account as well. I don’t think this is a case of some uneducated dude just making one unlucky trade.

Yup. I would also like to know how much $ he put in vs how much robinhood let him leverage for that money, and how difficult was for the kid to create one of those margin accounts.

[Trainwreck2100]

Lost in all this, is this kid thought his life was over, when even if he was minus 700k he could have just filed for bankruptcy and been fucked for 7 years.

[SpursforSix]

Money for nothing and the chicks for free.


great song, tbh

Holy shit. I have heard that song maybe a couple hundred times and had the cassette back in the day.
I was about to inform you that it's "checks for free".

[Chucho]

Don't completely disagree with this. But it's a separate matter from appealing to the uneducated through gamification.

Ala Camel Joe, flavored-tobacco and other marketing to get kids onto niccotine.


I can understand that to a sense, but this dude is 20 years old, not a kid.

How long should any business/society expect themselves to be responsible for a grown adult?

[Trainwreck2100]

The Kearns believe Alex's inexperience is what got him into trouble after a transaction last year. On June 11, he saw Robinhood restricted his account reflecting what appeared to be a negative balance of $730,000.

Later that night, at 3:26 a.m., the company sent an automated email demanding Alex take "immediate action," requesting a payment of more than $170,000 in just a few days.


Robinhood had no customer service phone number, but Alex emailed its support address three times late that night and the following morning. He asked for help understanding what had happened, and whether he could still offset the losses with another trade.

Alex wrote, "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?"

In response, he received an automated message: "Thanks for reaching out to our support team!" The email said, "We wanted to let you know that we're working to get back to you as soon as possible, but that our response time to you may be delayed." The company assigned him a case number, 06849753.



The day after Alex took his own life, Robinhood sent an automated email suggesting the trade had been resolved and he didn't owe any money.

"Great news!" The email read, "We're reaching out to confirm that you've met your margin call and we've lifted your trade restrictions. If you have any questions about your margin call, please feel free to reach out. We're happy to help!"

https://www.cbsnews.com/news/alex-kearns-robinhood-trader-suicide-wrongful-death-suit/

They wanted him to pay 170k when in actuality he owed zero, goddamn.

[lefty20]

This is why you just diamond hands until green. /s

I wasn't a user back then, but Robinhood's margin investing had some big problems initially.

There's the famous "guh" incident caused by their lack of proper margin restrictions.

[InRareForm]

https://www.insider.com/steelworker-in-china-jumps-into-furnace-after-devastating-stock-losses-2021-3

Over 9000 seems small, but I guess when bills are piling up it's a lot for some

[Millennial_Messiah]

https://www.insider.com/steelworker-in-china-jumps-into-furnace-after-devastating-stock-losses-2021-3

Over 9000 seems small, but I guess when bills are piling up it's a lot for some

It's over nine thousaaaaaaaaand!!!

[Millennial_Messiah]

9000 is not a lot of money it's about a half month's worth for me after taxes and expenses.

[SpursforSix]

https://www.insider.com/steelworker-in-china-jumps-into-furnace-after-devastating-stock-losses-2021-3

Over 9000 seems small, but I guess when bills are piling up it's a lot for some

Tragic. But impossible to know the whole story. Who knows what kind of person he was and how much he owed. Also, $9000 is a life savings for probably the vast majority of the world.

Also, I'll add on that it's pretty much gambling for a lot of "investors". So if you believe that gambling should be heavily regulated, then it should apply to stock trading.
But that will never happen because the top end need the little guys to dump stocks into.

[Blake]

9000 is not a lot of money it's about a half month's worth for me after taxes and expenses.

That's a lot of Arby's

[Millennial_Messiah]

That's a lot of Arby's

But how much gasoline in Obama (whoops I meant Biden)'s America?

[TimDunkem]

But how much gasoline in Obama (whoops I meant Biden)'s America?
That would get you almost 4000 gallons in SA.

[Millennial_Messiah]

That would get you almost 4000 gallons in SA.

So about 1500-2000 gallons in CA and about 2500-3000 in Michigan?

[Millennial_Messiah]

Spurtacular help me out, how much is gas per gallon from a reputable gas station (i.e. top tier, not from Costco/Sams/Walmart or some sketchy mom and pop no-name convenience store).

[Millennial_Messiah]

Where you live

[ChumpDumper]

It's probably lower than average in Apple Valley.

[DMC]

Stop calling that ass clown an investor. He was a gambler, plain and simple.

[Millennial_Messiah]

Stop calling that ass clown an investor. He was a gambler, plain and simple.

Agreed 100%.

[Millennial_Messiah]

.