The Supreme Court agreed Friday to hear Robinhood's challenge to a class-action lawsuit filed by investors over its 2021 IPO. The lawsuit claims Robinhood omitted interim financial data from its registration statement.
Robinhood conducted its IPO in July 2021. The registration statement included only limited information about Robinhood's performance during the second quarter of 2021. After the IPO, when Robinhood reported its actual second-quarter financial results, the stock price dropped.
Investors alleged the registration statement omitted material information Robinhood was legally required to disclose. The lawsuit names Goldman Sachs and J.P. Morgan Securities as defendants alongside Robinhood.
A San Francisco federal court judge had dismissed the lawsuit. The 9th Circuit Court of Appeals revived it. Robinhood asked the Supreme Court to overturn that appeals court decision.
The Trump administration and the Securities and Exchange Commission urged the Supreme Court to hear the case. "We are pleased the Supreme Court has agreed to hear our case and look forward to presenting our argument," a Robinhood spokesperson said.