Jaime Rogozinski, creator of the Reddit community that created the “meme stocks” trend that sent shares of companies like AMC Entertainment and Cinemark on wild rides the last few years, is suing the platform, accusing it of breaching contract by booting him from his role as moderator of the WallStreetBets forum in 2020 and infringing on his right to trademark the name as his brand.
“I felt this was personal, and I felt betrayed,” Rogozinski told The Wall Street Journal.
A Reddit spokeswoman called the lawsuit completely frivolous and said his claims had no basis in reality, the Journal reported.
“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,” the spokeswoman said.
“It’s telling that he is filing this suit three years after he was banned from r/WallStreetBets and long after the community rose in mainstream popularity without his involvement,” she said. “We’ll respond directly in court and continue to protect the best interests of the communities and moderators on our platform.”
While the meme stock craze died down during 2022’s market slump, after being fueled by bored stimulus check recipients trapped at home during the pandemic lockdown, AMC and other stocks targeted in the forum remain volatile.
Rogozinski founded WallStreetBets in 2012 with an eye toward creating a more dynamic community than the dull analysis he found online and on cable news. The forum was relatively unknown until 2019, when major brokerages like Charles Schwab and Fidelity eliminated commissions, making trading more accessible and popular to ordinary investors, as opposed to Wall Street traders.
Those moves helped boost the WallStreetBets following, the Journal said. The forum now has 13.6 million subscribers.
Rogozinski started to encounter problems when he posted a link to his book on how millennials were treating the stock markets like a casino, which included stories from WallStreetBets, the Journal recounted. He also announced plans for a live trading competition sponsored by a firm called True Trading Group, which he promoted on the forum.
The Journal said that some users on the forum groused about Rogozinski’s promotions, and Reddit suspended him in April 2020 because he was “attempting to monetize a community,” and that its policy bans moderators from entering deals with third parties.
Reddit told the Journal that Rogozinski’s account was restored a week later, but he was permanently removed as moderator of WallStreetBets. The remaining moderators on WallStreetBets then banned the founder from ever participating on the forum.
Rogozinski’s appeals to the platform were unsuccessful.
The Journal said the suit, filed in federal court in the Northern District of California, claims that what Reddit actually prohibits is users carrying out moderation duties “in return for any form of compensation or favor from third parties.” Rogozinski was never paid for moderating the WallStreetBets forum.
Prior to his ban, Rogozinski also filed an application to trademark the “WallStreetBets” name in March 2020. Reddit has opposed the registration, arguing that it would suffer “irreparable damage” if the trademark were granted to Rogozinski.
The WallStreetBets brand is “a valuable asset of Reddit, and Reddit has amassed tremendous goodwill and rights through Reddit’s widespread and continuous use” of the brand in the U.S., lawyers for Reddit wrote in their filing to the U.S. Patent and Trademark Office.
Rognozinski separately sold the rights to his life story to RatPac Entertainment last year, one of at least eight different projects in the works about the meme stock phenomenon.
Thursday, following news of the suit, WallStreetBets users widely disparaged Rogozinski, with one user referring to him as “he who must not be named.”