Founder of WallStreetBets, who ignited meme stock frenzy, is suing Reddit

Feb 15 (Reuters) – The founder of WallStreetBets, believed to have helped fuel the frenzy of investors in ‘meme’ stocks, on Wednesday sued Reddit Inc, accusing it of wrongfully barring him from sharing the community moderate and undermine its trademark rights.

Jaime Rogozinski said his impeachment, purportedly for violating Reddit policies by “trying to monetize a community,” was a pretext to keep him from taking control of “a famous brand that helped Reddit launch in late 2021 reach a value of $10 billion”.

According to the complaint filed in federal court in Oakland, California, Rogozinski filed for the “WallStreetBets” trademark in March 2020, a month before his impeachment, when the community reached 1 million subscribers.

The community was founded in 2012 and now has 13.6 million subscribers.

“If you build it, they will come,” the complaint said, citing the 1989 film “Field of Dreams.” “Reddit’s dreams turned out to be Mr. Rogozinski’s nightmare, however, as the company insists, it builds, we’ll take it from you.’”

Reddit rejected Rogozinski’s claims.

“This is a completely frivolous lawsuit with no basis in reality,” a spokeswoman said. “Jamie has been removed as a moderator of r/WallStreetBets by Reddit and banned by the community moderators for trying to enrich himself. This lawsuit is another transparent attempt at self-enrichment.”

Rogozinski said he is a dual US-Mexican citizen living in Mexico City.

He is seeking at least $1 million in damages for breach of contract and violation 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 discussion, often among inexperienced investors, on online forums such as WallStreetBets and Twitter. Its popularity often leads to volatile stock prices that do not reflect the fundamentals or financial health of companies.

Prominent examples of meme stocks include AMC Entertainment Holdings Inc (AMC.N), Bed Bath & Beyond Inc (BBBY.O), GameStop Corp (GME.N), and Koss Corp (KOSS.O).

The case is Rogozinski v Reddit Inc, U.S. District Court, Northern District of California, No. 23-00686.

Reporting by Jonathan Stempel in New York; Edited by Leslie Adler

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