The complaint described the app's features - which included a digital confetti effect when users make trades - as "gamification." Galvin's office filed a complaint against Robinhood in December. He said it rewards daily usage of the app and encourages frequent trading. Galvin points to the company's marketing. "There was a very deliberate effort on the part of Robinhood to particularly entice younger, inexperienced investors." "I think it demands some sort of national standard for this behavior," he said. William Galvin, Massachusetts Secretary of the Commonwealth and the chief financial regulator in the state of Massachusetts, says online broker-dealers like Robinhood need greater regulation. Robinhood."īut some critics say Robinhood has been reckless in its rush to sign up new investors. "You don't need to become an investor," the ad announces, as a young woman in a jean jacket opens the app on her phone. The commercial is part of a larger marketing campaign called "We are all investors," a company spokesperson told CBS News. Robinhood says its mission is to bring younger and more diverse investors into the market – an approach the company highlighted in its Super Bowl ad this year. If you have any questions about your margin call, please feel free to reach out. "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. 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. It's the kind of pain that I don't think should be humanly possible for a parent to overcome." Dorothy Kearns said she and her son would spend evenings together in the kitchen. "I can't tell you how incredibly painful it is. I miss him more than anything," Dorothy Kearns said. Later that day, the sheriff knocked on the Kearns family's front door to deliver the news: Alex was dead. "Basically, 'We'll get back to you later.'"ĭan said his son just wanted an answer, but no one was there to respond. "And their response was a canned reply," Dan Kearns said. 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. He asked for help understanding what had happened, and whether he could still offset the losses with another trade.Īlex wrote, "I was incorrectly assigned more money than I should have, my bought puts should have covered the puts I sold. Robinhood had no customer service phone number, but Alex emailed its support address three times late that night and the following morning. He thought he screwed up beyond repair," Dan Kearns said. In fact, according to the family's attorneys, Alex may not have lost money at all, because of the way the options bets were structured. 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. On June 11, he saw Robinhood restricted his account reflecting what appeared to be a negative balance of $730,000. The Kearns believe Alex's inexperience is what got him into trouble after a transaction last year. Alex's Robinhood account was restricted and showed what appeared to be a negative balance of more than $700,000. "I don't understand how they allowed that to happen in the first place," Dan Kearns said. "I didn't see the harm in doing that." Dan Kearns said, adding he spoke with his son about responsible investing and believed Alex had "limited exposure."īut Dan and Dorothy Kearns didn't realize Robinhood had also approved Alex to buy and sell options, a risky financial instrument with the potential for huge losses. Dan and Dorothy Kearns knew Alex was trading stocks.
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