The U.S. Supreme Court gave notice on Nov. 13 that it will consider tossing out a lawsuit against online trading company Robinhood Markets that alleged it misled investors about the state of its financials ahead of an initial public offering (IPO).
Robinhood had experienced record-high financial growth in the first quarter of 2021, and its IPO took place in July that same year. Ahead of the IPO, the company did not alert investors that its financial growth was expected to dip back to previous levels, and might not be as robust as early 2021.
Investors who sued said Robinhood was obligated to publish that information before the IPO, even though the company’s disclosure statements were not due until August that year. They accuse the company of misleading through omission.
In its filing to the Supreme Court, Robinhood argued that “an issuer is not required to disclose any and all information a potential investor might want to know,” as long as it does not make any misleading statements.
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