This is a sad case of taking on risk without a clear understanding of the exposure, knowledge, or tools to manage the situation — never good. Get rich quick schemes rarely work out well.
However, it seems Robinhood, through acknowledging this young man’s death, recognizes its educational materials, need for more live support staff, and other measures, might not be up to par . . . dare I say, a contributing factor in his frame of mind and subsequent actions?
It has been proven that companies do have a responsibility for their products/services and it will be curious to see how far this case goes.
It is hard to imagine this case will go very far. The deceased himself would likely have been unable to sue Robinhood for the loss, if it had even been real, since most brokers require binding arbitration over disputes, not allowing lawsuits. I don’t really see how the parents have greater rights than the customer. Additionally, there was no huge loss, merely the misunderstanding of the deceased in reading the components of his brokerage statement. How is the broker supposed to be able to deduce the mental stability of its customers at all times–I don’t believe that the know your customer rules extend that far. Finally, the issue of suitability exists on the trade. The trade may not have been suitable for the customer, but that is a question of repairing the customers monetary loss, which from what I have read is relatively small and in line with the maximum loss of $10,000 the customer thought he had ensured. I just don’t see how Robinhood is responsible for the panic of a customer who misread their account statement.
Case Dismissed
Without Merit
This is a sad case of taking on risk without a clear understanding of the exposure, knowledge, or tools to manage the situation — never good. Get rich quick schemes rarely work out well.
However, it seems Robinhood, through acknowledging this young man’s death, recognizes its educational materials, need for more live support staff, and other measures, might not be up to par . . . dare I say, a contributing factor in his frame of mind and subsequent actions?
It has been proven that companies do have a responsibility for their products/services and it will be curious to see how far this case goes.
It is hard to imagine this case will go very far. The deceased himself would likely have been unable to sue Robinhood for the loss, if it had even been real, since most brokers require binding arbitration over disputes, not allowing lawsuits. I don’t really see how the parents have greater rights than the customer. Additionally, there was no huge loss, merely the misunderstanding of the deceased in reading the components of his brokerage statement. How is the broker supposed to be able to deduce the mental stability of its customers at all times–I don’t believe that the know your customer rules extend that far. Finally, the issue of suitability exists on the trade. The trade may not have been suitable for the customer, but that is a question of repairing the customers monetary loss, which from what I have read is relatively small and in line with the maximum loss of $10,000 the customer thought he had ensured. I just don’t see how Robinhood is responsible for the panic of a customer who misread their account statement.