It appears bad UI and thoughtless data display in the Robinhood fee-free stock trading app convinced a fledgling 20-year-old stock trader he was negative three-quarters of a million dollars. The scared young man stepped in front of a train.
CNN:
In other words, Kearns did not actually owe $730,000. But he was apparently led to believe he did.
"My sense is that it was all over nothing. It was a user interface issue," said Brewster.
Brewster blamed Robinhood for simultaneously pushing its product to young traders while not putting in safeguards to prevent this kind of confusion.
"That they didn't have enough foresight to think this might happen is offensive to me," he said.
A source familiar with Robinhood's procedures told CNN Business that during options trading it is possible that cash and buying power will display as negative until the other side of the trade is processed. That does not mean, however, that this is a negative balance due or debt.
Still, Brewster questioned why Robinhood hasn't done more to explain this issue to its mostly young users.
"Why is there no pop-up window to say this is not an actual obligation?" Brewster said. "Why is it necessary to show a bunch of millennials that you know are signing up in droves? Why is this OK?"