04:25 PM EDT, 08/29/2025 (MT Newswires) -- (Updates with the company's comment in the last paragraph.)

Robinhood Markets ( HOOD ) is facing the revival of an investor lawsuit over alleged omissions in its July 2021 initial public offering registration statement, a federal appellate court said Friday.

The US Court of Appeals for the Ninth Circuit has now in part revived a securities class action lawsuit against the online brokerage firm, ruling that a lower court erred in dismissing investor claims from 2021, it said.

Plaintiffs alleged that Robinhood left out "material information" from the registration statement, according to the court filing.

Robinhood increasingly turned its attention to trades of so-called meme stocks and dogecoin (DOGE-USD) in the early months of 2021, but its business slumped when meme stock-trading largely ceased, the filing said.

The company launched an IPO in July 2021 and its registration statement contained "only limited information" about its Q2 performance. After the IPO, the company reported Q2 results and shares fell following the release, the filing said.

The case will now be reinstated in California district court to determine if the company had failed to disclose the material information, the court said.

"As we've previously shared, the plaintiff's claims are meritless," a Robin Hood spokesperson said in an email to MT Newswires. "We are pleased with the Ninth Circuit's decision that affirms the District Court's dismissal of one of plaintiff's legal theories, and we look forward to demonstrating again that all claims should be dismissed."