Roblox under investigation by the US Securities and Exchange Commission

The US Securities and Exchange Commission (SEC) has launched an investigation involving Roblox.

As reported by Bloomberg, while the investigation is ongoing, the exact focus of the SEC’s probing remains unclear. The commission did however acknowledge the investigation was active, and said it could not currently share full details to ensure there was “no harm to the ongoing enforcement proceeding”.

The SEC was established after the 1929 Wall Street crash in a bid to protect American citizens from market manipulation. It requires public companies to submit quarterly and annual reports, as well as investigate possible violations of the securities laws.

“We have confirmed with Division of Enforcement staff that there are responsive emails between Enforcement staff referencing Roblox and that these emails are a part of an active and ongoing investigation,” an SEC spokesperson told Bloomberg, via a Freedom of Information request.

Reports suggest – though it is not confirmed – that the investigation may pertain to November’s report that Roblox misled investors by falsely reporting player numbers, and has highlighted yet more examples of inappropriate – and allegedly, illegal – content being shared via the platform.

In a clarifying note, Bloomberg stressed that whilst the investigation involves Roblox, it cannot confirmed that Roblox is the subject.

In response to November’s report, Roblox said at the time that it “rejects” its findings and pointed to previously-released details of its efforts to try and combat inappropriate content. It also stressed that it had previously acknowledged that “fraud and unauthorised access to [its] platform may contribute, from time to time, to an overstatement of DAUs”.

Roblox shares dropped by 20 percent last week after the platform’s reported daily active users fell short of analysts’ estimates.

For the fourth quarter (ending 31st December), the number of daily active users fell by four percent to 85.3 million compared to the previous quarter. Wall Street analysts had forecasted 88.4 million. Overall player engagement also declined by 9.7 percent in the same period to 18.7bn hours.

Eurogamer has contacted Roblox for comment.

This article has been updated to clarify that whilst Bloomberg notes the SEC has an investigation involving Roblox, it cannot confirm that Roblox is the subject.