Supreme Court agrees to hear Robinhood challenge to IPO lawsuit

The Supreme Court on Friday agreed to hear a case in which Robinhood seeks to block a class-action lawsuit over the omission of interim financial data from the online broker’s initial public offering in 2021.

Robinhood wants the Supreme Court to overturn a ruling by the 9th Circuit U.S. Court of Appeals that revived a lawsuit by investors against the company and firms involved with the IPO, including Goldman Sachs and J.P. Morgan Securities.

A San Francisco federal court judge had previously dismissed the lawsuit.

The Trump administration and the Securities and Exchange Commission had urged the Supreme Court to hear Robinhood’s appeal.

“We are pleased the Supreme Court has agreed to hear our case and look forward to presenting our argument,” a Robinhood spokesperson said in a statement.

CNBC has requested comment from the attorneys representing the plaintiffs in the case.

Robinhood’s IPO came on the heels of a surge in investor interest during the Covid-19 pandemic in so-called meme stocks, and trading in the crypto asset dogecoin.

In July 2021, Robinhood conducted its IPO, “for which it prepared a registration statement” that “contained only limited information about Robinhood’s performance during the second quarter of 2021,” the 9th Circuit panel that heard the case noted.

“After the initial public offering, Robinhood reported financial results from that second quarter, and its stock price dropped,” the panel wrote.

The investors who sued Robinhood and the other defendants alleged the registration statement omitted material information it was legally required to disclose.