What the case is about
Investors claim Robinhood's July 2021 IPO paperwork left out interim numbers they argue had to be disclosed. The 9th Circuit panel said the registration materials provided only narrow insight into second quarter 2021 performance. The plaintiffs contend that Robinhood's registration statement left out mandatory, material information.
How the legal fight reached the high court
A federal judge in San Francisco initially threw out the lawsuit. The 9th Circuit brought it back, pointing out that after the offering, Robinhood reported its second quarter results and the share price declined. Robinhood is asking the Supreme Court to undo that appellate decision, and the justices agreed Friday to hear the appeal. The Securities and Exchange Commission and the Trump administration urged the Court to grant review of Robinhood's petition.
Who else is involved and what happens next
The complaint also targets other IPO participants, including Goldman Sachs and J.P. Morgan Securities. Robinhood said, "We are pleased the Supreme Court has agreed to hear our case and look forward to presenting our argument." CNBC asked the plaintiffs' attorneys for comment. The offering took place while retail interest was surging in so-called meme stocks and in the crypto asset Dogecoin, a backdrop that framed the IPO.
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Why it matters for your portfolio
Robinhood's IPO followed a pandemic-era surge in trading of so-called meme stocks and the crypto asset Dogecoin.
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