20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative

[Yaunfitda]

20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative Balance

I hate to bring this sad news, but I thought that everyone could learn a thing or so, specially those young traders out there who are vulnerable. Its really really sad to hear this kind of news, specially a very young kid at 20 years who ended his life.

The note found on his computer by his parents on June 12, 2020, asked a simple question. “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” The tragic message was written by Alexander E. Kearns, a 20-year-old student at the University of Nebraska, home from college and living with his parents in Naperville, Illinois. Earlier that day, Kearns took his own life.

In fact, a screenshot from Kearns’ mobile phone reveals that while his account had a negative $730,165 cash balance displayed in red, it may not have represented uncollateralized indebtedness at all, but rather his temporary balance until the stocks underlying his assigned options actually settled into his account.

https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/#5421ac305928

[winterlemon912]

20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative Balance

I hate to bring this sad news, but I thought that everyone could learn a thing or so, specially those young traders out there who are vulnerable. Its really really sad to hear this kind of news, specially a very young kid at 20 years who ended his life.

The note found on his computer by his parents on June 12, 2020, asked a simple question. “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” The tragic message was written by Alexander E. Kearns, a 20-year-old student at the University of Nebraska, home from college and living with his parents in Naperville, Illinois. Earlier that day, Kearns took his own life.

In fact, a screenshot from Kearns’ mobile phone reveals that while his account had a negative $730,165 cash balance displayed in red, it may not have represented uncollateralized indebtedness at all, but rather his temporary balance until the stocks underlying his assigned options actually settled into his account.

https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/#5421ac305928

I cannot also manage that problem so maybe if that thing happens to me, I am also going to kill myself so it is better if you don't start trading until you learn how to trade in a right way and how to manage your money. If you feel you are losing, stop trading and continue tommorow with a great start. I hope that something like this will be no more happen. If there will be another case like this, maybe the users are going to scared on using crypto currency and that will be a big reason for mass adaptation to occur on a longer time.

[Lucius]

This is unfortunately a tragic example of how ignorance can kill a person, because it is actually something they have called an "interface issue". Kearns's trading required knowledge of the system and how it actually showed the data, and what he saw was actually only temporary and the negative balance wasn't really negative in the literal sense of the word.

Inexperience, a lack of knowledge, and a system set up to display data in a rather clumsy way have convinced someone that he have a debt of as much as $730 000. I hope this will be a good lesson to others not to play with things they don’t understand.

Kearns may not have realized that his negative cash balance displaying on his Robinhood home screen was only temporary and would be corrected once the underlying stock was credited to his account. Indeed it’s not uncommon for cash and buying power to display negative after the first half of options are processed but before the second options are exercised—even if the portfolio remains positive.

[Jating]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

[jcpone]

Well, honestly I'm not exactly so sure about what I understand about the article.
As I can see with the story the kid decided to suicide himself because of 730, 000$. Now, the 730k$ was the
kids debt? Correct me if I am wrong to my understanding, that's what I felt actually.

[SFR10]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

I believe they do and they have reached out to his family but they're not yet ready for speaking to RH.

Well, honestly I'm not exactly so sure about what I understand about the article.

Basically, it was an issue with the UI.
<sup>Read the following links with its comments:
- This and this.</sup>

[Lakai01]

Well, honestly I'm not exactly so sure about what I understand about the article.
As I can see with the story the kid decided to suicide himself because of 730, 000$. Now, the 730k$ was the
kids debt? Correct me if I am wrong to my understanding, that's what I felt actually.

This is actually quite clearly stated in the linked article. The 20-year-old was shown a balance of -730k (screenshot of his mobile phone can be found in the article).This is supposed to be a display problem due to the kind of options he was probably experimenting with. Here is the relevant part of the article again:

Kearns may not have realized that his negative cash balance displaying on his Robinhood home screen was only temporary and would be corrected once the underlying stock was credited to his account. Indeed it’s not uncommon for cash and buying power to display negative after the first half of options are processed but before the second options are exercised—even if the portfolio remains positive.

“Tragically, I don’t even think he made that big of a mistake. This is an interface issue, they have slick interfaces. Confetti popping everywhere,” says Brewster referring to the shower of colorful confetti Robinhood routinely deploys after customers make trades. “They try to gamify trading and couch it as investment.”

It is of course extremely tragic when something like this happens because of a display problem and something like this has such consequences. I hope that the Exchanges will take this case as an opportunity to improve the situation and show, for example, that the amounts displayed do not correspond to the actual balance.

[stompix]

Inexperience, a lack of knowledge, and a system set up to display data in a rather clumsy way have convinced someone that he have a debt of as much as $730 000. I hope this will be a good lesson to others not to play with things they don’t understand.

Reminds me of the tales from the oil price crash, the same problems, and "technical difficulties" scared the hell of a lot of traders, in some cases people with a few tens of dollars were suddenly millions in debt:
A day trader who bought hundreds of oil contracts was told he owed $9 million after a trading-platform issue meant it failed to show oil's historic plunge below $0
Trading is not for the faint hearted, and not for the ones that are betting all their money on something they don't truly understand.

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

If they had a disclaimer in their ToS about this exact situation and how a negative balance might show up and what are the true implications they will get away with it without anything happening. If not they will probably just enter a settlement with the family.

[Baofeng]

Well, honestly I'm not exactly so sure about what I understand about the article.
As I can see with the story the kid decided to suicide himself because of 730, 000$. Now, the 730k$ was the
kids debt? Correct me if I am wrong to my understanding, that's what I felt actually.

Yes, that debt forces the kid to commit suicide of the huge amount he incurred.

This is really tragic to see someone to take his life because of debt. Not the first time to hear though, but he is still young. Robinhood is not commenting on the subject, but definitely they have to improve their system/service as a result of this incident.

[gentlemand]

This was picked up on by CZ and binance implemented a timeout for shit traders.

https://mobile.twitter.com/cz_binance/status/1273872555791638528

The normalisation of leveraged trading in all areas is one of modern life's weirder developments. It wouldn't have occurred to older generations.

A total waste of a life. I hope someone learns something from it.

If it were me I would've gotten a job counting penguins somewhere remote and popped back a few years later.  That's if it was an actual debt which if it isn't is even more unfortunate.

[justdimin]

I think a big debt doesn't really mean you should end your life, it is probably one of the worst things that could happen to you considering you have zero income and only a 20 year old kid.

However being a 20 year old kid is a good part of being in debt, you still have a long life ahead of you and you could pay it back slowly. Sure it will cripple your whole economy and you would be living probably in poverty for majority of your life just to be able to pay it back, however taking your own life is not really a solution to the problem, it is running away from it. If he kept his head down, lived a bad life, it would still be a life, it wouldn't be great, it would be bankruptcy filled one with worrying where the next meal will come from but at least he would be alive.

[gentlemand]

Sure it will cripple your whole economy and you would be living probably in poverty for majority of your life just to be able to pay it back

Go bankrupt. That's the point of it. It'll screw with aspects of your life for quite a long time but it's far from the end of the world. Millions of people do it around the world. If you're looking at a debt that'll take more than 3-5 years to pay off that's the recommended option.

https://www.debt.org/bankruptcy/

[tbterryboy]

I think it’s high time we start letting people know that trading is not a means to gather gold and silver, it’s a very risky thing to engage yourself in, because you can lose everything in it. This is a really bad news and something anyone would never wish to come to them, but that’s not enough reason for him to take his life.

I feel really sorry for him and I wish he didn’t take his life because of this and I wish he didn’t even involve himself in this kind of thing. Young adults shouldn’t involve themselves in this without guidance. They should always have someone that guiding them to avoid making mistake. There is nothing in life that is enough to make anyone take their life.

[exstasie]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

Don't get me wrong, this is tragic and everything. But how did he not dig into his transactions at all and realize the option expiration and stock settlement don't occur at the same time?

How do you just look at a cash balance on your screen and decide to kill yourself?

Maybe call support first and ask why you're account is down $730K (when the max risk of that structure was probably $1-2K).....

[Saisher]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

That's true the blame is on the company, it's very deceiving to put something like that without a big notification that it's only temporary, this is a big lesson learned for the company or any trading company, real time results should be displayed or give an explanatory note that will explain the balance, but it's over now,I wonder if they can sue the company for negligence for showing that kind of balance.

[Lorence.xD]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

I do not think that the app is not liable, yes that is their interface problem but wouldn't the interpretation fall back to user? He could've contacted the app's tech support but he did not because of utter shock, I for one would be shock that I would incur that kind of debt because that is a lot of money, this is a tragedy that imparts us a lesson that there will be hardships that will test our mental fortitude and we need to be ready whenever that time comes.

[Mpamaegbu]

That's a real huge lump sum, if you asked me. But money is still here making itself and he took a life he couldn't create. Material wealth shouldn't be handled as if they were a matter of life and death.

I think this also underlines the fact of people not wanting to read T&C of every contract they indulge before clicking the "Accept" button. Perhaps such bug would've been taken care of in the T&C as an occurrence that possibly will happen. Well, RIP to the lad.

[btc_angela]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

I do not think that the app is not liable, yes that is their interface problem but wouldn't the interpretation fall back to user? He could've contacted the app's tech support but he did not because of utter shock, I for one would be shock that I would incur that kind of debt because that is a lot of money, this is a tragedy that imparts us a lesson that there will be hardships that will test our mental fortitude and we need to be ready whenever that time comes.

Yes he could have call the support and ask what really happen to his account and why the hell with all those negative numbers? But then again, he is very young, and really don't know how to react with the huge debt in front of him. And we really don't know what inside his mind, and for him that time, the best thing to is kill himself, so it's really a tragedy and hope that crypto traders will have that mental toughness and not make hastily decision.

[Jating]

Can Robinhood though has some liability here? It seems that the victim saw negative balance but the article it is just temporary but this could have triggered everything. If Robinhood display it real-time, this could have been avoided?

Don't get me wrong, this is tragic and everything. But how did he not dig into his transactions at all and realize the option expiration and stock settlement don't occur at the same time?

How do you just look at a cash balance on your screen and decide to kill yourself?

Maybe call support first and ask why you're account is down $730K (when the max risk of that structure was probably $1-2K).....

We can only speculate, we don't know what the kid is thinking. You have to factor in that he is still very young, he could be trading thousands of dollars one time, but would you react at 20 years of age to see that you debt? Maybe he didn't think clearly at that time and that's why he didn't call support and ask for details, maybe for him this is everything and he put the blame on himself, triggering emotional stress and the eventual collapse psychologically.

[pawanjain]

Though this is a very tragic and a sad incident, it gives a strong message to the people about why we should educate ourself so much that we understand the basic complexities of technology. If that person would have understood that it's a technical glitch then and would have been patient for a while then he would not committed the terrible act of suicide. Day by day the technology around is evolving and with the development of more technological stuff, there comes more technical problems. So it is our responsibility that we educate ourself to embrace the growth of technology.