Overstock faced a lawsuit for an allegation of misrepresenting the nature of its digital dividend token.
Current retail president David Nielson, former CFO Gregory Iverson, ex-CEO, and founder Patrick Byrne of Overstock faced a lawsuit for violating securities laws.
The lawsuit also claimed that the company also published wrong year-end predictions regarding the profitability of its tZERO.
Overstock faced a lawsuit for an allegation of misrepresenting the nature of its digital dividend token . The shareholders of the company will receive a token to every ten overstock share which is the dividend security token airdrop that will see OSTKO token. This news of dividend made surges in the share price of Overstock. This leads to plaintiffs accuses the company of purposefully withholding information of the distribution. This was a deceiving act in the market.
The sudden up move caused severe loss to short-sellers. Besides that current retail president David Nielson, former CFO Gregory Iverson, ex-CEO and founder Patrick Byrne of Overstock faced a lawsuit for violating securities laws. This happened because Byrne left the company and regarding the liquidation of 20% of Byrne’s share.
The lawsuit also claimed that the company also published wrong year-end predictions regarding the profitability of its security token exchange tZERO . This caused up move in OSTK shares and Byrne was able to cash out at a premium. The news of bullish buzzing regarding tZERO and digital dividend caused a surge in OSTK price over 97%. As a result, when Byrne cashed out, he made a $90 million profit. That is the main reason behind the lawsuit.
Overstock Arguments Against the Accusations
Overstock filled that the company did not misrepresent the nature of the Dividend. Hence, according to the company, there is no chance of hiding the impact to the short-sellers. Besides, Overstock argued the lead plaintiff of law The Mangrove Partners Master Fund made the lawsuit as they are well-known short-seller. However, The Mangrove Partners Master Fund claims that they are institutional short-seller. Overstock provides an argument that the impact of the dividend was well-known from day one. Hence, the company thinks the warrants should be dismissed.
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