The Supreme Court has agreed to hear Robinhood's bid to block a class-action lawsuit over interim financial data left out of its 2021 IPO. The company wants the justices to overturn a 9th Circuit ruling that revived the investors' case.
The Supreme Court agreed on Friday to hear a case in which Robinhood seeks to block a class-action lawsuit over the omission of interim financial data from its 2021 initial public offering. A Robinhood spokesperson said the company looks forward to presenting its argument.
Robinhood wants the court to overturn a ruling by the 9th Circuit U.S. Court of Appeals that revived the investors' lawsuit. The suit also names firms involved with the IPO, including Goldman Sachs and J.P. Morgan Securities. Previously, a San Francisco federal court judge had dismissed it.
Administration and SEC back the appeal
The Trump administration and the Securities and Exchange Commission had urged the Supreme Court to hear Robinhood's appeal. CNBC has requested comment from the attorneys representing the plaintiffs.
What the investors allege
Robinhood's IPO came after a surge in investor interest during the Covid-19 pandemic in so-called meme stocks and in trading of the crypto asset dogecoin. In July 2021, Robinhood conducted its IPO, and the 9th Circuit panel noted that its registration statement contained only limited information about its performance during the second quarter of 2021.
After the IPO, Robinhood reported financial results from that quarter, and its stock price dropped, the panel wrote. The investors allege the registration statement omitted material information the company was legally required to disclose.
Source: CNBC
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