Robinhood wins dismissal of shareholder lawsuit over 2021 IPO By

Robinhood wins dismissal of shareholder lawsuit over 2021 IPO © Reuters. FILE PHOTO: The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company’s IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly/ 6){ atwWrapper.find(‘.js-slider-next’).fadeIn(600); } } function atwMoveRight() { atwWrapper.find(‘.js-slider-prev’).fadeIn(150); $(“.slider > :visible:first”).hide(150) $(“.slider > :visible:last”).next().show(150); if(!$(“.slider > :visible:last”).next().find(‘.name’).html()){ atwWrapper.find(‘.js-slider-next’).fadeOut(150); return; } } function atwMoveLeft() { atwWrapper.find(‘.js-slider-next’).fadeIn(150); $(“.slider > :visible:last”).hide(150); $(“.slider > :visible:first”).prev().show(150); if(!$(“.slider > :visible:first”).prev().find(‘.name’).html()){ atwWrapper.find(‘.js-slider-prev’).fadeOut(150); return; } } initATWSlider(); //update star icon on adding/removing instrument to/from specific watchlist atwWrapper.on(‘click’, ‘label.addRow’, function() { let parent = $(this).parent(); let checkedPortfolio = false; parent.find(‘input[type=checkbox]’).each(function () { if($(this).is(‘:checked’)){ checkedPortfolio = true; } }); let closestStar = $(this).closest(‘.addToPortWrapper’).find(‘.star’); if(checkedPortfolio){ closestStar.addClass(‘added’); }else{ closestStar.removeClass(‘added’); } }); //update star icon on creating new watchlist atwWrapper.find(‘.js-create-watchlist-portfolio’).find(‘a.js-create’).on(‘click’,function () { let parent = $(this).parent(); let watchlistName = parent.find(‘input[type=text]’).val(); if(!watchlistName){ return; } let star = $(this).closest(‘.addToPortWrapper’).find(‘.star’); star.addClass(‘added’); }); //update star icon on adding new position atwWrapper.find(‘.js-create-holdings-portfolio’).find(‘.js-submit’).on(‘click’,function () { let addPositionForm = $(this).closest(‘.addToPortfolioPop’).find(‘.holdingsContent’); let amount = addPositionForm.find(‘.js-amount’).val(); if(amount

By Jonathan Stempel

(Reuters) – A U.S. judge on Friday dismissed a lawsuit accusing Robinhood Markets Inc (NASDAQ:) of misleading investors about the online brokerage’s financials and growth prospects when conducting its 2021 initial public offering.

U.S. District Judge Edward Chen in San Francisco found no proof that disclosures in Robinhood’s IPO materials were false or misleading, or that declines in key metrics shortly before the company went public in July 2021 were historically extraordinary.

He said Robinhood’s warnings about future growth were “not particularly robust,” but were sufficient.

“Plaintiffs thus failed to plead that Robinhood did not disclose ‘material factors’ that would make an investment in Robinhood speculative or risky,” Chen wrote.

Shareholders in the proposed class action said Robinhood had concealed “severe deterioration” in the two months before the Menlo Park, California-based company’s IPO.

They said this included the number of people who actively used its platform, how much revenue they generated, assets under custody, and a 90% decline in cryptocurrency trading volume.

Shareholders said Robinhood’s stock price fell as much as 82% to $6.81 last June from the $38 IPO price as the company became, in the words of a JPMorgan (NYSE:) analyst, “a growth company without the growth.”

Chen also dismissed claims against Robinhood Chief Executive Vladimir Tenev, other company officials, and the IPO underwriters led by Goldman Sachs (NYSE:) and JPMorgan.

The plaintiffs were led by Vinod Sodha, a psychiatrist from Beverly Hills, California, and his daughter Amee Sodha, a doctor from Millburn, New Jersey. Chen gave them permission to file an amended complaint.

Lawyers for the plaintiffs did not immediately respond to requests for comment. Robinhood and its lawyers also did not immediately respond to similar requests.

Robinhood reported on Wednesday a loss for 2022 of $1.03 billion, or $1.17 per share, on net revenue of $1.36 billion.

The case is Sodha et al v Robinhood Markets Inc et al, U.S. District Court, Northern District of California, No. 21-09767.


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