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The tragic case of Alex Kearns, 20, a college student who killed himself in June last year after mistakenly believing he had lost a fortune to online trading app Robinhood, demonstrates the dangers of novice investors failing to understand the products they purchase, according to experts.
Kearns used the app to start trading options in his first year of college and a series of trades resulted in him seeing a negative balance of $730,000 in his account, which he thought he owed Robinhood.
His family is now suing the online broker, accusing it of allowing inexperienced investors to take big risks in complex financial instruments without providing investment guidance or the necessary customer support.