Founder of WallStreetBets, which helped ignite meme stock frenzy, sues Reddit
2023.02.15 20:43
© Reuters. FILE PHOTO: Reddit logo is seen in this illustration taken November 7, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Jonathan Stempel
(Reuters) – The founder of WallStreetBets, which has been credited with helping ignite investors’ frenzy into “meme” stocks, sued Reddit Inc on Wednesday, accusing it of wrongly banning him from moderating the community and undermining his trademark rights.
Jaime Rogozinski said his ouster, ostensibly for violating Reddit policy by “attempting to monetize a community,” was a pretext to keep him from trying to control “a famous brand that helped Reddit rise to a $10 billion valuation” by late 2021.
According to the complaint filed in federal court in Oakland, California, Rogozinski applied to trademark “WallStreetBets” in March 2020, one month before his ouster, when the community reached 1 million subscribers.
Founded in 2012, the community now has 13.6 million subscribers.
“If you build it, they will come,” the complaint said, quoting from the 1989 movie “Field of Dreams. “Reddit’s dreams, however, turned out to be Mr. Rogozinski’s nightmare as the company insists, ‘if you build it, we will take it from you.'”
Reddit rejected Rogozinski’s claims.
“This is a completely frivolous lawsuit with no basis in reality,” a spokeswoman said. “Jamie was removed as a moderator of r/WallStreetBets by Reddit and banned by the community moderators for attempting to enrich himself. This lawsuit is another transparent attempt to enrich himself.”
Rogozinski said he is a dual U.S.-Mexican citizen, and lives in Mexico City.
He is seeking at least $1 million in damages for breach of contract and violations of his publicity rights, and a ban on Reddit’s use of WallStreetBets unless it reinstates him as senior moderator of the r/WallStreetBets subreddit.
Meme stocks typically gain popularity through discussions, often among inexperienced investors, in online forums such as WallStreetBets and Twitter. The popularity often leads to volatile stock prices that do not reflect companies’ fundamentals or financial health.
Prominent examples of meme stocks have included AMC Entertainment (NYSE:) Holdings Inc, Bed Bath & Beyond Inc (NASDAQ:), GameStop Corp (NYSE:) and Koss Corp.
The case is Rogozinski v Reddit Inc, U.S. District Court, Northern District of California, No. 23-00686.
