The US Supreme Court asked President Donald Trump’s administration on Monday to weigh in on whether it should hear Robinhood Markets Inc.’s bid to end an IPO lawsuit.
The proposed class action accuses Robinhood of misleading investors about its financials and growth outlook before its July 2021 initial public offering.
Investors Vinod Sodha and Amee Sodha sued under the Securities Act of 1933. They said Robinhood failed to disclose how fading meme-stock and cryptocurrency trading could affect its business.
The plaintiffs pointed to trading tied to GameStop and Dogecoin. They said Robinhood’s stock fell sharply after post-IPO results showed weaker revenue and key performance indicators.
Robinhood denies the claims. The Menlo Park, California-based brokerage said its IPO documents warned investors about risks tied to earlier trading spikes.
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US District Judge Edward Chen dismissed the lawsuit in 2024. However, the 9th US Circuit Court of Appeals revived part of the case in 2025 after finding that the district court used the wrong legal standards.
Robinhood has urged the Supreme Court to take the case. It said the 9th Circuit ruling could expose companies to broad liability and force disclosures of minor information.
