SEC Concludes Case Against Roblox in May, Details Remain Unclear

The US Securities and Exchange Commission (SEC) concluded a case involving online video-game platform Roblox Corp. in May, according to a document obtained by Bloomberg News. The case was opened in October and finished seven months later, but the nature of the investigation and any determination made are not specified. Roblox was accused of child-safety concerns and inflating its metrics, but the company rejected the claims.

The U.S. Securities and Exchange Commission (SEC) concluded a case involving online video-game platform Roblox Corp. in May, according to a document seen by Bloomberg News [1]. The investigation, which was opened in October, lasted seven months before its conclusion. The nature of the investigation and any determination made by the SEC remain unspecified.

Roblox has been under scrutiny for child-safety concerns and allegations of inflating its metrics. In October, the now-defunct short-seller Hindenburg Research published a report detailing child-safety issues and alleged that Roblox had inflated its user metrics [1]. Roblox rejected these claims, stating that the authors were short-sellers betting against the stock [1].

The company has faced additional criticism and legal action. Louisiana filed a lawsuit against Roblox, accusing it of prioritizing user growth and profits over child safety [2]. The lawsuit alleges that Roblox's lack of age verification and effective parental controls has made the platform a "digital hunting ground" for predators [2]. The state of Louisiana is not the only entity taking action; Congressman Ro Khanna of California has also weighed in, starting a petition for stronger safeguards and better cooperation with law enforcement [2].

The controversy has had a significant impact on Roblox's stock, with shares plunging over 9% following the Louisiana lawsuit [3]. The company's stock has seen a 16% decline since its record closing high on July 31 [3]. The growing scandal has sparked investor concern over potential long-term reputational damage and increased regulatory risk [3].

Roblox has implemented an artificial-intelligence-backed system to detect messages containing language related to child sexual abuse, but critics argue that more needs to be done to protect its young user base [4]. The company's stock, symbolized as RBLX, has been volatile, reflecting investor unease over the company's handling of child safety issues.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-15/roblox-case-at-sec-concluded-in-may-agency-document-shows
[2] https://www.gamingamigos.com/post/chris-hansen-roblox-documentary
[3] https://sherepricetarget.com/roblox-rblx-stock-plummets-as-outrage-mounts-over-child-safety-failures/
[4] https://www.marketwatch.com/story/criticism-of-roblox-for-its-child-safety-measures-is-starting-to-spook-investors-d608a820