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Alexander Kearns Wiki – Biography
Alexander Kearns was found dead less than 24 hours after checking his balance on Robinhood, an app that enables users to invest in stocks and offers “unlimited commission-free trades,” the news outlet reported. Kearns blamed Robinhood for allowing him to accrue a negative cash balance of $730,165 when he had “no clue” — but hat might not have actually been the case, a family member told CNN.
“The kid threw himself in front of a train over nothing, because a tech company can’t figure out they shouldn’t show a negative $730,000 cash balance to a 20-year-old kid,” Bill Brewster, Kearns’ cousin-in-law, said to CNN Business.
While the company can’t disclose any details surrounding the student’s account, a spokesperson told PEOPLE Magazine they are “deeply saddened” by the news.
“All of us at Robinhood are deeply saddened to hear this terrible news and we reached out to share our condolences with the family over the weekend,” the statement read. “We will not share any details regarding the account to respect privacy and confidentiality.”
The magazine reported that Kearns had a “keen interest in markets and the economy” and began experimenting with the app during the COVID-19 pandemic.
Brewster took to Twitter to express his concern over the risks for first-time investors relating to the free-trading boom and its easy access to complicated trading instruments like options.
But here’s the truth. AND PLEASE PAY ATTENTION TO THIS IF YOU’RE YOUNG.
The markets are bananas right now. It’s not the time for amateurs. Really really pay attention to position sizing. Stay away from exotic instruments like options and futures.
— Bill Brewster (@BillBrewsterTBB) June 13, 2020
Brewster, who is an analyst at Sullimar Capital, told PEOPLE Magazine that he believes the financial statement may have actually represented “his temporary balance until the stocks underlying his assigned options actually settled into his account.”
He explained that he received a wave of responses on Twitter suggesting the issue stems from the app’s confusing user interface.
“When he saw that $730,000 number as a negative, he thought that he had blown up his entire future,” Brewster said to Forbes.
Kearns was potentially involved in a “bull put spread,” Forbes reported, which ‘involves selling put options at a higher strike price, and buying puts at a lower strike price, both with the same expiration.”
A screenshot of Kearns’ phone shows the account at a negative $730,165 cash balance displayed in red. Forbes said the number might” not have represented uncollateralized indebtedness at all,” but just a temporary statement until his assigned option underlying stocks settled.
Alexander Kearns Age
Alexander Kearns was 20 years old.
Cause of Death
This is truly a tragic incident.
My deepest condolences to the Kearns family and to @BillBrewsterSCG who shared this story. @RobinhoodApp needs to be held accountable and make changes to its UI.#Fintwit please help us share this story! 🙏https://t.co/J4qtLfQVmk
— Alex Chalekian (@AlexChalekian) June 18, 2020
A yellow sticky note instructed Kearns’ father to turn on his son’s computer, CNBC reported. The message, “If you’re reading this, then I am dead,” then flashed across the screen.
Kearns’ note recounts the 20-year-old’s desperation over his alarming account balance, according to a screenshot posted to Brewster’s Twitter. He blamed Robinhood for throwing him for a loop and allowing him to pile on too much risk, according to the note.
To the media – This is paragraph 1 of the suicide note. It’s part of the public domain. Quote away.
If you’d like verification, the family will provide that. pic.twitter.com/Q9Kb2hgccn
— Bill Brewster (@BillBrewsterTBB) June 17, 2020
“How was a 20-year-old with no income able to get assigned almost a million dollar’s worth of leverage?” Kearns writes. “The puts I bought/sold should have canceled out, too, but I also have no clue what I was doing now in hindsight.”
Adding, “There was no intention to be assigned this much and take this much risk, and I only thought that I was risking the money that I actually owned. If you check the app, the margin investing option isn’t even ‘turned on’ for me. A painful lesson. F— Robinhood.”
Kearns’ body was found on Friday, Plainfield Illinois Fire Department Chief, Jon Stratton told CNBC. He was studying management and had a growing interest in financial markets, the outlet added.
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The company’s founders released a statement on June 19 promising to expand the platform’s educational resources, upgrade its user interface and tighten criteria for eligibility.
Co-founders Vlad Tenev and Baiju Bhatt wrote in the statement on their website that they were “personally devastated by this tragedy” and do not take their responsibility lightly.
“It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood,” they expressed. “We recognize this profound responsibility, and we don’t take it lightly. Our aspiration is to innovate, lead, and go beyond the status quo.”
The pair pledged to add tougher criteria and better educational outlets to make sure customers can fully grasp the app’s nature the dynamic of trades.
Adding more than 3 million users in the first quarter of 2020, according to CNN, Robinhood is also working to change the way buying power is displayed on the user interface.
The free-trading app will donate $250,000 to the American Foundation for Suicide Prevention, the founders’ statement claims.