Robinhood CEO Vlad Tenev is apologizing to the family of Alexander Kearns, a 20-year-old who died by suicide last year believing he owed more than $730,000 on the trading app.
Tenev was asked about tragic incident during Thursday's Congressional hearing into the recent rise and fall of GameStop stocks, in which he and several prominent executives — including Reddit CEO and co-founder Steve Huffman and Melvin Capital CEO Gabriel Plotkin — testified in front of the U.S. House Financial Services Committee.
"First of all, I'm sorry to the family of Mr. Kearns for your loss," Tenev said during the virtual hearing. "The passing of Mr. Kearns was deeply troubling to me and the entire company."
According to Tenev, the company has taken a number of "aggressive steps" to make their product safer for users and prevent a similar situation from happening again, including changing Robinhood's interface, increasing educational materials on the app, tightening requirements for options, and adding a live customer service line for acute option cases.
"It was a tragedy and we went into immediate action to make sure we made not just the most accessible options trading product for our customers, but the safest as well," Tenev said.
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Kearns died by suicide in June 2020 after he was led to believe he owed more than $730,000 after making some risky trades, according to a complaint previously obtained by PEOPLE. His parents recently filed a wrongful death lawsuit against Robinhood, seeking accountability from the company.
According to the lawsuit, Kearns was sent an email demanding immediate action asking for a minimum deposit payment of more than $170,000, and when the college student attempted to reach customer service, he was unsuccessful.
"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?" Kearns wrote in one of several emails to Robinhood seeking help. According to the suit, all he received was an automated email saying the support team would get back to him "as soon as possible, but that our response time to you may be delayed."
Kearns' father, Dan Kearns, told CBS This Morning earlier this month that his son "thought he blew up his life. He thought he screwed up beyond repair."
Tragically, the day after Kearns died by suicide, Robinhood finally returned his email — and it turned out that he didn't own any money at all.
"Great news!" the email — another automated message — said, according to CBS News. "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!"
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The family's complaint against Robinhood alleges that the company uses "aggressive tactics and strategy to lure inexperienced and unsophisticated investors" — including Kearns.
The complaint, obtained by PEOPLE, says that Kearns was allowed to invest far above his experience level and was provided with "almost no investment guidance, and its customer 'service' was virtually non-existent, consisting of automated email replies devoid of any human contact or interaction."
"Tragically, Robinhood's communications were completely misleading, because, in reality, Alex did not owe any money," the complaint says. "He held options in his account that more than covered his obligation, and the massive negative balance would have been erased by the exercise and settlement of the puts he held."
A spokesperson for the company previously told CBS News, "Our mission is to democratize finance for all. We designed Robinhood to be mobile-first and intuitive, with the goal of making investing feel more familiar and less daunting for an entire generation of people previously cut out of the financial system"
"Our focus has always been on breaking down systemic barriers to investing to help more people take control of their finances," they said.
In a company blog post published on Thursday, Tenev said that Robinhood users have made more than $35 billion since the app's launch.
"Today, the total value of our customers' assets on Robinhood exceeds the net amount of money they have deposited with us by over $35 billion," he wrote. "While markets fluctuate, this tells me that our business model is working for everyday Americans. This is the Robinhood community. Many people say that Robinhood has helped them to pay car loans, reduce student loan debt, meet daily bills, and save for the future. We're proud to serve them."
If you or someone you know is considering suicide, please contact the National Suicide Prevention Lifeline at 1-800-273-TALK (8255), text "STRENGTH" to the Crisis Text Line at 741-741 or go to suicidepreventionlifeline.org.
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