Robinhood CEO Vlad Tenev apologized to the family of Alex Kearns, the young customer who committed suicide last year after encountering catastrophic trading issues, during a portion of his Congressional testimony Thursday over the GameStop trending frenzy.
"I am sorry to the family of Mr. Kearns on your loss. The passing of Mr. Kearns was deeply troubling to me and the entire company" said Tenev in response to a question. Previously the firm had released a statement on his passing.
Kearns' family is suing Robinhood, stating the 20-year student at the University of Nebraska-Lincoln, mistakenly thought he owed more than $700,000 over a risky options bet.
"Not only did Robinhood permit Alex to open the account, but when Alex was a freshman in college later that year, it permitted him to trade options. Those options it turned out had the potential of his becoming obligated to pay for over $700,000 in securities, an amount he had no possible means of paying. Worse, Robinhood provided almost no investment guidance, and its customer 'service' was virtually non—existent, consisting of automated e-mail replies devoid of any human contact or interaction" according to the complaint reviewed by FOX Business.
Filed last month in California state court in Santa Clara County, it seeks unspecified damages on behalf of the parents and sister of Kearns for wrongful death, negligent infliction of emotional distress, and unfair business practices.
Tenev was also pressed on what the firm has done to prevent similar lapses.
“There were several improvements, one we added the ability to instant exercise, as well as exercise options positions in-app. We clarified the display of buying power, specifically negative buying power in situations where one leg of a complex multi-leg options transaction were to be assigned. We also added options education specialists and we also added live phone-based customer support for acute options cases" he explained.
Robinhood and other firms have been called out on social media during times of extreme trading over long wait times for customer service reps, which include the height of the pandemic market volatility last March, as well as last month during the GameStop chaos.
[Editor's note: This story discusses suicide. If you or someone you know is having thoughts of suicide, please contact the National Suicide Prevention Lifeline at 1-800-273-TALK (8255)]