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Emailing someone with a lie that they owe you six figures and then not responding within 24 hours seems like more than negligence to me. We're not talking about

Emailing someone with a lie that they owe you six figures and then not responding within 24 hours seems like more than negligence to me. We're not talking about an out of the blue support request, or even a support request prompted by an actual six-figure debt.

djbebs 6y ago
It wasnt a lie though. He WAS margin called, hence why the second leg of his options trade activated. At the time the email was sent (and until the next day) he did owe that much money. These are complex financial products, and he should have known how they worked before playing with them.
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- unanswered 6y ago
  From the article, not relying on any other unnamed sources which can't be vetted: > Later that night, at 3:26 a.m., the company sent an automated email demanding Alex take "immediate action," requesting a payment of more than $170,000 in just a few days. They did not say, "one leg of your trade is now $170k in the red". After all, apparently that leg was $700k in the red. No, according to the article (which may be misleading, but I'm just trying to tl;dr it not run an independent investigation), Robinhood claimed that the customer needed to send them $170k immediately with unspecified consequences for failing to do so. If the debt could in fact be covered by other positions in the account (which is what the article says the customer's lawyers say), then Robinhood's claim is a lie. The customer did not need to transfer $170k into the account, there were other actions he could take. You say he should have known that he had other avenues. Indeed, I acknowledge that explicitly in my original comment when I point out that the customer knew that what Robinhood had told him could not be true. But because of the knowledge imbalance he apparently came to doubt his own knowledge and believe the lie. That is why such a lie is particularly heinous, just as on the other case I mentioned.
  - djbebs 6y ago
    Again, it was not a lie, that is how margin calls are supposed to work. If you don't want it to work that way, you have a simple solution, dont use margin to trade complex financial products. Look, i get where you're coming from, but the fact is that these are complex financial products that most people shouldn't use. They are risky, and have non-obvious mechanisms inherent to them that make them dangerous, thats why he had to take a test before being allowed to trade them. This was a depressed man who was trading in highly leveraged products and got spooked when he tripped over one of many stumbling blocks, and immediately killed himself over it. Its a sad story, but there was no negligence here, and nobody to blame but himself.
    - thingsgoup 6y ago
      I think you’re mostly right but part of what the lawsuit is about as I understand it is the idea that Robinhood is encouraging the guy to use said complex financial products that were clearly way out of his wheelhouse.
      - djbebs 6y ago
        I hardly think that requiring a test and affirmation of responsibility before allowing trading of options to be "encouraging" people to use them. If the government were to impose such restrictions on something like voting, they would rightfully be slammed as intending to restrict and discourage voting, so how can one argue in good faith that the same restrictions imposed on something else encourage that something else?

djbebs 6y ago

It wasnt a lie though. He WAS margin called, hence why the second leg of his options trade activated. At the time the email was sent (and until the next day) he did owe that much money. These are complex financial products, and he should have known how they worked before playing with them.

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unanswered 6y ago
From the article, not relying on any other unnamed sources which can't be vetted: > Later that night, at 3:26 a.m., the company sent an automated email demanding Alex take "immediate action," requesting a payment of more than $170,000 in just a few days. They did not say, "one leg of your trade is now $170k in the red". After all, apparently that leg was $700k in the red. No, according to the article (which may be misleading, but I'm just trying to tl;dr it not run an independent investigation), Robinhood claimed that the customer needed to send them $170k immediately with unspecified consequences for failing to do so. If the debt could in fact be covered by other positions in the account (which is what the article says the customer's lawyers say), then Robinhood's claim is a lie. The customer did not need to transfer $170k into the account, there were other actions he could take. You say he should have known that he had other avenues. Indeed, I acknowledge that explicitly in my original comment when I point out that the customer knew that what Robinhood had told him could not be true. But because of the knowledge imbalance he apparently came to doubt his own knowledge and believe the lie. That is why such a lie is particularly heinous, just as on the other case I mentioned.
- djbebs 6y ago
  Again, it was not a lie, that is how margin calls are supposed to work. If you don't want it to work that way, you have a simple solution, dont use margin to trade complex financial products. Look, i get where you're coming from, but the fact is that these are complex financial products that most people shouldn't use. They are risky, and have non-obvious mechanisms inherent to them that make them dangerous, thats why he had to take a test before being allowed to trade them. This was a depressed man who was trading in highly leveraged products and got spooked when he tripped over one of many stumbling blocks, and immediately killed himself over it. Its a sad story, but there was no negligence here, and nobody to blame but himself.
  - thingsgoup 6y ago
    I think you’re mostly right but part of what the lawsuit is about as I understand it is the idea that Robinhood is encouraging the guy to use said complex financial products that were clearly way out of his wheelhouse.
    - djbebs 6y ago
      I hardly think that requiring a test and affirmation of responsibility before allowing trading of options to be "encouraging" people to use them. If the government were to impose such restrictions on something like voting, they would rightfully be slammed as intending to restrict and discourage voting, so how can one argue in good faith that the same restrictions imposed on something else encourage that something else?