July 1 (UPI) — Trading app Robinhood said Thursday it has settled a wrongful death lawsuit filed on behalf of a 20-year-old trader.
The case, which accused Robinhood of wrongful death, negligent infliction of emotional distress and unfair business practices, was dismissed with prejudice after a settlement between the parties, the company said in its initial public offering filing.
Alex Kearns died by suicide in June 2020 after mistakenly believing he owed $730,000 through his Robinhood account and the company failed to respond to his attempts to contact them about the issue.
Kearns’ family filed the lawsuit in February and court filings indicate a settlement was reached in May before the case was permanently dismissed on June 21.
While testifying before Congress in February in the wake of the company deciding to halt trading on shares of GameStop, AMC Entertainment and others as they faced a short squeeze, Robinhood CEO Vlad Tenev said the company was taking steps to prevent future misunderstandings, including changing the app’s interface; providing live, phone-based support; and hiring an education specialist in response to the lawsuit.
News of the settlement also came after the Financial Industry Regulatory Authority on Wednesday fined Robinhood $57 million and ordered it to pay $12.6 million in restitution for “misleading” customers and systems outages last year.