Roblox Corporation (NYSE: RBLX) operates a video game platform that provides developers with tools to create games that are hosted on the Company’s servers. Roblox generates revenue by selling its proprietary currency (called “Robux”) to its users so they can purchase digital items (e.g., weapons, armor, or vehicles) to enhance their gaming experiences.

A recently filed securities fraud class action complaint alleges that Roblox, via certain of its officers and directors, made material misrepresentations to investors concerning Roblox’s bookings growth and the adequacy of its user protection controls.  User protection controls are a particular concern for the Company as about half of the Company’s users are under the age of 13, thus exposing Roblox to various Federal Trade Commission (“FTC”) regulations and other online gaming laws that are geared toward protecting minors.

Specifically, it is alleged that the Company misrepresented or failed to disclose that:(1) the Roblox platform had insufficient content controls and lacked user spending restrictions; (2) these inadequate controls enabled younger Roblox users to play games with inappropriate content and make excessive, unauthorized Robux purchases; (3) a material portion of Roblox’s bookings and revenue growth was due to these excessive, unauthorized Robux purchases; (4) fourth quarter 2021 and 2022 bookings would be negatively impacted by Roblox’s planned rollout of enhanced parental controls; and (5) based on the foregoing, the Company’s bookings and revenue growth was unsustainable.

Current Roblox shareholders who have held Roblox stock since on or shortly after the Company’s March 10, 2021 direct listing, can seek corporate reforms, the return of funds spent defending litigation back to the company, and a court approved incentive award at no cost to them whatsoever.

If you would like to learn more about this matter, you are encouraged to contact Joshua H. Grabar at jgrabar@grabarlaw.com, or Mia Heller at mheller@grabarlaw.com,  call 267-507-6085.