From CNBC · Dan Mangan · · 1m 10s
Supreme Court to hear Robinhood IPO lawsuit challenge
The Supreme Court will consider Robinhood's bid to block a class-action lawsuit over omitted financial data from its 2021 IPO.
In brief
The Supreme Court will consider Robinhood's bid to block a class-action lawsuit over omitted financial data from its 2021 IPO. The Supreme Court agreed to hear Robinhood's challenge to a lawsuit alleging the company omitted material financial information from its 2021 IPO registration statement. Originally reported by…
Supreme Court takes Robinhood case
The Supreme Court agreed Friday to hear Robinhood's challenge to a class-action lawsuit over its 2021 initial public offering. The company seeks to block the case entirely.
What the lawsuit alleges
Investors sued Robinhood, Goldman Sachs and J.P. Morgan Securities, claiming the IPO registration statement omitted material information about the company's second quarter 2021 performance.
The 9th Circuit revived the case
A San Francisco federal judge had dismissed the lawsuit, but the 9th Circuit U.S. Court of Appeals revived it. Robinhood now asks the Supreme Court to overturn that ruling.
Stock fell after financial results emerged
In July 2021, Robinhood's registration statement contained only limited information about second quarter performance. After the IPO, when actual results were reported, the stock price dropped.
“After the initial public offering, Robinhood reported financial results from that second quarter, and its stock price dropped.”
The essence
The Supreme Court agreed to hear Robinhood's challenge to a lawsuit alleging the company omitted material financial information from its 2021 IPO registration statement.
