Investors blamed Overstock and its former CEO Patrick Burn for securities fraud

Investors from retail giant Overstock.com filed a class action lawsuit accusing the company itself, its former CEO Patrick Byrne, and financial director Greg Iverson of securities fraud. About it writes The Block .

In a lawsuit filed on September 27 with the Utah Federal Court, it claims that after a long period of time during which Overstock suffered financial losses, the company came up with a new initiative involving profit in new cryptocurrency markets.

According to the plaintiffs, despite the difficult financial situation of the company, Patrick Burn spent at least 220 days a year over the past few years, speaking with his “blockchain sermons”.

As a matter of fact, investors are unhappy with the new Overstock dividend payment scheme called tZERO Dividend. It was based on digital assets released on the tZERO subsidiary blockchain platform.

In July, shareholders were also offered a special type of dividend (Digital Voting Series A-1 Preferred Stock), which was supposed to be traded on tZERO. However, as it turned out in practice, in addition to the extremely risky “short squeeze” strategy, investors could not resell the shares for six months from the start of the dividend.

As an example, the lawsuit describes the following situation: on September 13, shares were trading at $ 26.89, but on September 18, after three trading days, investors learned about the upcoming “short squeeze” and price reduction to $ 15.50.

Against this background, the news that last week Patrick Byrne sold all his Overstock shares , earning them a little less than $ 100 million, accused government agencies of conspiring with major Wall Street players to artificially understate him. company stock prices.

For Berne himself, the news of the collective lawsuit of investors was another unpleasant blow to the whole series of events that followed his resignation from CEO Overstock in August. Recall that decision Bern accepted in the light of the Russian spy scandal with Maria Butina, with whom he has for several years had a romantic relationship.

Shortly after, a number of investors left the tZERO platform.

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