WallStreetBets' founder is suing Reddit over ousting him from the meme-stock forum, reportedly saying he wants $1 million after the 'nightmare' ban

• Jaime Rogozinski, the founder of Reddit's WallStreetBets forum, is suing the social media platform.
• He wants $1 million in damages, per Reuters, after being banned as moderator of the birthplace of the meme-stock craze.

The founder of WallStreetBets is suing Reddit for ousting him as moderator of the forum, the birthplace of the meme stock craze.

Jaime Rogozinski alleges that Reddit wrongfully terminated him in April 2020, according to a complaint filed in federal court in Oakland, California on Wednesday.

Rogozinski is seeking $1 million worth of damages for breach of contract and violation of his publicity rights, per Reuters – and his lawyers used a quote from the 1989 Kevin Costner film "Field of Dreams" to sum up his allegations.

"'If you build it, they will come,' entrepreneurs tell themselves," they said in the complaint.

"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'".

"While other social media platforms endeavor to compensate their content creators, Reddit works to capture, take credit for, and monetize other people's creations."

WallStreetBets skyrocketed in popularity in 2021 as retail investors used the subreddit to identify and then pump so-called meme stocks.

Forum chatter produced huge swings in the share prices of companies like GameStop and AMC, with GameStop surging nearly 1,000% during a two-week period in January 2021.

Rogozinski says he was ousted by Reddit after writing a book titled "WallStreetBets: How Boomers Made the World's Biggest Casino for Millennials" in January 2020 and applying to trademark the forum's name two months later. He also launched an e-sports trading competition with the aim of raising brand awareness, he said.

In the suit, Rogozinski accused Reddit of undermining his trademark rights.

The platform removed him from his position as a moderator of WallStreetBets in March 2020 on the basis that he had violated company policy by "attempting to monetize a community".

But Rogozinski — who founded WallStreetBets in 2012 — said in his complaint that its justification was a pretext. He claimed his true offense was "trying to control the brand he created in the first place, a famous brand that helped Reddit ride to a $10 billion valuation".

The social media company was valued at $10 billion in an August 2021 private funding round, but was recently valued by Fidelity at $6.6 billion, per The Information.

Reddit is now asserting its ownership over all of its subreddit brands as part of its revival of its plans to go public, according to the lawsuit.

"This is a completely frivolous lawsuit with no basis in reality," a Reddit spokesperson said in response to Insider's request for comment.

The spokesperson added that Rogozinski was removed as a moderator of WallStreetBets by Reddit and banned by community moderators "for attempting to enrich himself."

"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," they said. "We'll respond directly in court and continue to protect the best interests of the communities and moderators on our platform."

The community had 1 million subscribers when Rogozinski filed to trademark the WallStreetBets name in March 2020. It now has 13.6 million subscribers, according to data from Reddit.

Rogozinski's legal representative did not immediately respond to Insider's request for comment, which was sent outside regular business hours.

The case is Rogozinski v Reddit Inc., 23-cv-00686, US District Court, Northern District of California (Oakland).