- Allegedly board members “dumped” securities before they fell
- This allowed them to avoid a $1 billion loss
- The author of the lawsuit demands a return of illegally gained profits to the company
Adam Grabski filed a lawsuit yesterday, May 1, against top Coinbase executives.
He claims that members of management took advantage of corporate information to “dump” the stock exchange in advance, avoiding significant losses.
Boomberg reports this, citing the Delaware Court of Chancery. The lawsuit says the following:
“Using insider information, exchange board members sold stock within days of the exchange’s IPO two years ago.”
A month after COIN listed on Nasdaq, its capitalization fell by more than $37 billion. Shares of the exchange “sagged” by a total of $1 billion amid “bad news.”
Before, when the rate was at its peak, Coinbase CEO Brian Armstrong sold $291.8 million worth of securities, and Mark Andriessen, for example, sold $118.6 million.
Grabsky demands a “refund” of illegally gained income.
The lawsuit targets Armstrong, Andrissen, company president Emily Choi, CFO Alesia Hass, chief accounting officer Jennifer Jones and several other board members.
Coinbase has not let the lawsuit go unchallenged:
“As one of the most popular and only public cryptocurrency exchanges in the United States, we often become the subject of meritless litigation. This is just such a case.”
It’s interesting that this is not the first time Coinbase has appeared in an insider trading case. You can read about the past case here.