The creator of the WallStreetBets (WSB) subreddit, Jaime Rogozinski, which sparked the meme stock craze by rallying retail investors to stocks like GameStop, has filed a lawsuit against Reddit alleging breach of contract and trademark infringement.
The Wall Street Journal reports that Jaime Rogozinski, the creator of the popular WallStreetBets (WSB) subreddit and the mastermind of the meme stock crazy, has filed a lawsuit against Reddit, claiming that the social media site violated his trademark rights for the WallStreetBets brand and removed him from his position as a WSB moderator in 2020.
The lawsuit is the most recent chapter in the WSB subreddit’s saga, which gained much attention during the meme stock retail trading craze of 2019–2021. Rogozinski started the subreddit in 2012 as a forum for stock market discussion and wagering. The GameStop short squeeze and a congressional hearing into the role of social media in market manipulation, among other recent controversies, brought the subreddit to the attention of the country. During the GameStop short squeeze, retail traders joined forces to purchase shares of the reeling video game retailer, driving up the stock price.
In his lawsuit, Rogozinski accuses Reddit of a breach of contract, claiming that by removing him as a WSB moderator, the social media site went against its own rules. Rogozinski also accused Reddit’s opposition to his trademark application for the WallStreetBets brand as another violation. Rogozinski asserts that he is “entwined” with the WallStreetBets brand and that a major production company has purchased the rights to his life story.
Reddit has rejected Rogozinski’s lawsuit as “completely frivolous” without “any basis in reality.” The social media site asserts that the community moderators banned Rogozinski and removed him as a moderator because he tried to enrich himself. Reddit asserts that it will directly respond in court to defend the best interests of the communities and moderators on its platform and that the lawsuit is a blatant attempt by Rogozinski to enrich himself.
Rogozinski’s lawsuit claims that by removing him as a WSB moderator, Reddit transgressed its own rules. According to the lawsuit, Reddit accused Rogozinski of trying to monetize the community by promoting his book and a live trading competition that would be supported by a company called True Trading Group. In April 2020, Reddit informed Rogozinski that his account had been suspended due to him “attempting to monetize a community.”
Reddit moderators are allegedly not allowed to enter “agreements with third parties on behalf of a subreddit.” according to the lawsuit. Rogozinski, however, asserts that he was “very open” about promoting the competition and selling his book, and that he had never accepted payment for moderating the WSB forum.
Rogozinski made several attempts to contest Reddit’s ruling, claiming that the company’s policies didn’t contain any language forbidding his conduct. Even if it did, he said in the interview, it was a stretch for Reddit to assert that he had been profiting from a community by posting links to his book.
According to Rogozinski’s lawsuit, investment giant Fidelity, for instance, used its Reddit community to “generate awareness” of its goods and services, but that didn’t seem to be a problem for the website.
Additionally, it is claimed in the lawsuit that Reddit violated Rogozinski’s ownership of the WallStreetBets trademark. Weeks before being banned by Reddit in March 2020, Rogozinski submitted a trademark application for “WALLSTREETBETS” Reddit opposed the trademark registration in August of that same year, claiming it would sustain “irreparable damage.”