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Legal Action Initiated Against Coinbase Board Members and Executives for Insider Trading

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Gherardo Fiorenzo
Gherardo Fiorenzo is an Italian author with a unique perspective shaped by his experiences in Italy and the US. His thought-provoking articles, short stories, and reviews explore the intersections of language, identity, and culture.

Prosecute in state court in Delaware alleges Coinbase CEOs enriched themselves by $1.09 billion by failing to disclose negative information of the company prior to its listing shares in April 2021.

defendants in The lawsuit includes CEO Brian Armstrong and Bars venture capitalists.

Millions of dollar in he won

On May 1, Investor in Coinbase shareholder Adam Grabsky has filed a lawsuit on On behalf of of All shareholders, naming Coinbase CEO Brian Armstrong and his management teamand prominent investors Marc Andreessen and Fred Wilson as defendants.

According to the lawsuit, Coinbase allegedly did not disclose the unfavorable information about it business During 2021 initially public an offer. The lawsuit also alleges that the company insiders sold out shares on the market just before the negative news They were released, which allowed them to profit millions of dollar.

It was also made clear that the company’s revenue margins were squeezed during first Finance quarterand a diluted convertible was released, causing the share price to drop by over 37% by May 18.

The lawsuit alleges that the defendants had access to material non-public information About the company’s health before liquidity event And that trading on this information Prohibited by Delaware law.

the suit also Includes details about the secret plan of Coinbase board Togo publicwhich was internally called “Fruit of the Fall Project”.

An alternative to going public

company made a debut on April 14th with Initial public put up (IPO), where new shares issued to public. At this time, Coinbase has chosen for List directly of Existing shares during public debut.

According to the lawsuit, the primary interest of The direct menu was that shares being made available for public Sale existed before shares already Owned by Coinbase executives and investors.

This allowed them directly Take advantage of any stock sales, unlike the initial public offering (IPO) in any new shares It is usually issued.

Coinbase denies all allegations in statement to The Block, describing the lawsuit as “futile” and “frivolous”.

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