Alexander Kearns, who committed suicide after seeing a negative balance of $730,000 on his Robinhood app, is not the first trader driven to death by financial disaster.
The untimely death of Alexander Kearns, the 20-year-old who committed suicide after seeing a negative balance of $730,000 on his Robinhood app, has shocked traders, the crypto community and the wider world. The event also gained mainstream media attention and coverage in Forbes, CNN, CNBC, Fox and further afield.
Even more appalling is that Kearns was unlikely to have incurred the massive loss that caused him such despair. A note left on his computer read: “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?”
The deeply tragic answer is that he wasn’t. The inexperienced trader did not know that the negative balance showing on his Robinhood UX was only temporary, and that it would be resolved when the underlying stock was credited to his account. The huge negative figure was only a fiction, and one which proved deadly for the young Kearns.
Thanks to crypto, blockchain, and trading apps such as Robinhood, ever greater numbers of private individuals are able to access financial services to which they may at one time have been locked out. As the barriers begin to break and the old world of finance begins to lose its grip, we now take the opportunity to examine the dark heart of banking, financial institutions and money. We found a wholly unforgiving environment in which even the most seasoned and hardened of campaigners are often driven over the edge and into the abyss.
On December 22nd 2008, Hedge Fund founder and French aristocrat Rene-Thierry Magon de la Villehuchet, dismissed his staff for the day before locking himself in his plush New York office. He then gulped down a dose of sleeping pills before reaching for a boxcutter and hacking into his left bicep and wrist. When his body was found, investigators noted that he had placed his left arm inside a waste bin to avoid soiling the carpet. His hedge fund AIA Group had recently lost $1.5 billion, including his own personal fortune, in the Bernie Madoff ponzi scheme. In a note sent to his brother, Mr de la Villehuche said he felt personally responsible to his investors. The guilt of a career ended in ignominy had proved too much for the conscientious Frenchman.
On May 27th, 2016, Martin Senn, Chief Executive of Zurich Insurance, shot himself while at his family’s Alpine resort home in Klosters. He left behind a wife and two children. Friends of Senn said he had become withdrawn and reclusive following his unplanned retirement just 6 months earlier, which was described as “by mutual agreement” – a neat corporate euphemism for fired.
There was nothing to suggest that Senn was an individual particularly at risk of killing himself. His professional history had demonstrated a remarkable string of promotions, achievements and considerable talent. He’d become Manager of Swiss Bank in Hong Kong at the tender age of just 26, and later became Manager of Trading and Investment Services for Credit Suisse. He led Investments at Zurich Insurance from 2006 before a further promotion in 2009. It was in 2013 following the resignation of then CEO Josef Ackermann that the top job became available to him.
At first it seemed that all was well for Senn, but after a series of “setbacks” in 2015 – another neat corporate euphemism, this time for profit warnings – and a bungled acquisition bid for British rival RSA Insurance, Senn suddenly found himself retired in December that year. The executive high-flyer struggled to adapt to his loss of status, to a lack of purpose, and to the perception of his tenure as a failure. When Senn later died in May 2016, the event struck a ghostly ring of deja vu.
Senn’s predecessor, Josef Ackermann, had retired just three years earlier in 2013 under the scandal of suicide; that of his finance chief Pierre Wauthier. According to family members, Wauthier complained about pressure from Ackermann, pressure to report yearly financial reports in a way which suited his CEO and the board, but Wauthier less so. Like finance chiefs everywhere Wauthier would be ‘on the hook’ for anything reported in a less than satisfactory manner. After 16 meetings in the space of two days, and complaining of excessive pressure from management, Wauthier hung himself. Perhaps, somewhere hidden in the ledgers of the company’s financial statements, the roots of Martin Senn’s later “setbacks” could be found.
Upon Ackerman’s resignation he conceded nothing other than the fact that others held him responsible: “I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be,” he said. In any case, within just three years, two C-level executives at Zurich Insurance had been found dead by their own hand.
Anjool Malde was a young, 24-year-old London stockbroker who just purchased a holiday penthouse in Spain, and described himself as “living the dream”. On Sunday July 5th, 2009, Malde strolled into the City’s Coq d’Argent, where he ordered himself a glass of champagne. He then headed to the restaurant’s grassy roof terrace, climbed over the barrier, and jumped. The only explanation that anyone could offer was a prank message on a careers website that read, “I’m hot. I’m hot”. When a client complained, the IP address of that post was traced to Malde’s computer. The young exec was asked to attend a meeting with Deutsche Bank director Keith Leno on the Friday before his death. At the meeting Malde claimed the message was sent by someone else using his computer, a jealous colleague out to discredit him. Whether sent by him or someone else, this schoolboy prank and the increased pressure of the resulting investigation proved too much for Malde.
William Broeksmit was a top executive for Deutsche Bank who reported directly to its CEO Anshu Jain, and who became increasingly anxious about ongoing financial investigations following the LIBOR scandal. In January 2014, Broeksmit’s wife found him hanging from a dog leash tied to the top of a door in his West London home. Medical examiners declared him dead at the scene.
That same month, 39-year-old Gabriel Magee used boltcutters to open a padlocked hatch at JP Morgan’s London Headquarters, before diving from the 32nd floor. An empty bottle of tequila was left at the jump site. Notes on his computer included “try to jump off building” and “hate my life”. It took 4 hours for investigators to remove as much as they could of Magee’s body from the concrete, but according to colleagues and witnesses at the scene, the blood stains persisted even after they had left.
Just a few days later Russell Investments’ Chief Economist, Mike Dueker, jumped from a ramp to his death near the Tacoma Narrows Bridge in Tacoma.
One month on, a 33-year-old junior investment banker jumped from the roof of JP Morgan’s Hong Kong office. That same month another JP Morgan executive, 37-year-old co-executive director Ryan Crane, died from unknown causes in his Stamford, Connecticut home. All this, in just the first two months of the year.
The Hard Facts
Due to the way deaths figures are recorded and presented, the true scale of suicides within finance, banking and trading is hard to accurately calculate. Most countries don’t filter suicides by profession. Whether the death rates within finance are higher than in other industries is still a matter of contention, but in times of financial instability suicide rates rise across the board. In 2007 world suicide rates were falling, but by 2009 they had risen by 6.5% – an increase which continued right through into 2011.
Those at the sharp end of that equation, working in the finance and banking sectors, must be considered particularly at risk in hard times. Another contributing factor to the high-suicide rates in finance is that it is a particularly male-dominated industry. Men are widely known to be at higher risk of committing suicide than women. In the UK for example the male suicide rate is 17.2 deaths per 100,000, but for women the rate is a far lower 5.4 deaths per 100,000.
Further, one of the biggest factors in suicide rates is stress, in a industry that is known to be extremely high-pressure. The key difference between those in traditional finance and the incoming disruptors and new traders is that the new breed are not playing with the money of others, they are playing with their own. The sums of money may be considerably smaller, but to those who are risking them such as Alexander Kearns, the pressure and resulting loss of life is the same. The pattern which follows is all too familiar.
We stand today at the dawn of a new age in finance. One in which the people are swiftly becoming their own masters. In doing so however, we must also be prepared for the potential of bad to come with the good. With the high emotions and stresses that finance can produce, is it too much to ask that companies such as Robinhood create products that fairly and accurately reflect users’ exposure to risk?