Robinhood Markets Inc. (NASDAQ:HOOD) stock tumbled on Monday following news that the U.S. Supreme Court had intervened in an ongoing legal dispute regarding the company’s 2021 initial public offering (IPO).

The Nasdaq is up 0.49% while the S&P 500 has gained 0.10%.

The Supreme Court asked President Donald Trump‘s administration to weigh in on whether the justices should hear a bid by Robinhood to shut down a proposed class-action lawsuit, reported Reuters. The lawsuit accuses the online brokerage of misleading investors about its financials and growth prospects before going public.

• Robinhood Markets stock is showing notable weakness. Why is HOOD stock dropping?

Plaintiffs’ Claim Meme Stock Reliance Masked

The legal battle stems from allegations that Robinhood failed to adequately disclose how severely its financial prospects depended on temporary trading frenzies.

The plaintiffs, led by psychiatrist Vinod Sodha and his daughter Amee Sodha, sued under the Securities Act of 1933.

Plaintiffs claimed Robinhood made false and misleading ...