US financial services company Robinhood has settled a wrongful death lawsuit filed by the family of 20-year-old college student Alex Kearns who committed suicide after seeing a negative account balance of $730,000. On Thursday, Robinhood disclosed the settlement in its IPO filing, however, the terms of the agreement have not been disclosed.
In February, Alex Kearns’ family accused the company of luring inexperienced investors into taking big risks in complicated financial instruments without providing necessary investment guidance and much-needed customer support. According to Kearns’ family, he made many attempts to get in touch with Robinhood before he took his own life, but his approaches went unanswered. The lawsuit accused the company of wrongful death, negligent infliction of emotional stress, and unfair business practices. Executives of the company have said they were devastated by Alex Kearns’ death and have highlighted efforts to improve Robinhood’s options trading, customer service, and educational efforts.
According to court filings, the settlement was reached in late May and the case was permanently dismissed on June 21.
