Roblox under investigation by US Securities and Exchange Commission

Roblox, the popular online platform, is currently under scrutiny by the US Securities and Exchange Commission (SEC). The SEC has initiated an investigation into Roblox, although the specific focus of this inquiry has not been explicitly disclosed. However, the SEC has confirmed the existence of an active investigation and stated that full details cannot be shared at this time to avoid compromising the enforcement process.

Established post the 1929 Wall Street crash, the SEC aims to safeguard American citizens from market manipulation. Public companies are mandated to submit quarterly and annual reports, and the commission also scrutinizes potential violations of securities laws. In a recent development, it has come to light that there are responsive emails within the Enforcement staff that mention Roblox as part of an ongoing investigation.

While the specifics of the probe are not officially confirmed, reports suggest it might be related to allegations from November. These allegations claim that Roblox provided misleading information to investors regarding player numbers and highlighted instances of inappropriate and potentially illegal content being shared on the platform. In response to previous reports, Roblox vehemently refuted the claims and emphasized its ongoing efforts to address inappropriate content. The platform clarified that instances of fraud and unauthorized access may occasionally lead to an overstatement of daily active users.

Last week, Roblox faced a significant setback as its shares plunged by 20 percent due to daily active users falling short of analysts’ projections. In the fourth quarter concluding on December 31st, daily active users declined by four percent to 85.3 million compared to the previous quarter, well below the estimated 88.4 million. Additionally, overall player engagement also decreased by 9.7 percent to 18.7 billion hours during the same period.

The impact of this investigation and the repercussions on Roblox remain uncertain. Eurogamer has reached out to Roblox for their commentary on these recent developments but has not received a response yet. As this story unfolds, the future of Roblox and its user base is under scrutiny in the wake of these ongoing investigations by the SEC.