Coinbase CEO Sued By Company Shareholders For Breaking Strategy
A Coinbase shareholder has filed a derivatives lawsuit against Coinbase CEO Brian Armstrong and other executives over the company’s 2021 public listing. This shareholder believes that the executives have broken the “flywheel” strategy and caused losses to investors.
Coinbase CEO May Have to Compensate Investors for Loss
Crypto exchange Coinbase is facing a derivative lawsuit from a dissatisfaction over its 2021 stock listing.
The filing alleges that Coinbase misrepresented various facts and engaged in gross mismanagement before it obtained a direct listing on the stock market in April 2021. Specifically, the filing complains that Coinbase “generated a massive influx” on its exchange through an extensive advertising campaign prior to its listing. This caused an “unprecedented spike” in activity and led to service disruptions.
This sudden growth broke the company’s “flywheel” strategy and was detrimental to investors because Coinbase attracting a large number of users would “backfired, leaving [the company] and its newfound investors damaged and vulnerable to the competition“.
In addition to those claims, the lawsuit also alleges that Coinbase’s public listing violated securities regulations. It refers to related securities action from the US Securities and Exchange Commission, which determines whether a client is authorized to trade unregistered securities.
Today’s filing targets CEO Brian Armstrong, Chief Financial Officer Alesia Haas and Account Manager Jennifer Jones. In addition, directors Fred Ehrsam, Marc Andreesen, and Kathryn Haun, Gokul Rajaram, and Fred Wilson are listed as defendants.
The case was filed with the United States District Court for the County of Delaware. Various other lawsuits have been filed against Coinbase related to its IPO over the past year, including one in New Jersey and one in the Northern District of California.
The lawsuit, if successful, could see CEO Brian Armstrong and other executives pay damages to Coinbase itself.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Coinbase CEO Sued By Company Shareholders For Breaking Strategy
A Coinbase shareholder has filed a derivatives lawsuit against Coinbase CEO Brian Armstrong and other executives over the company’s 2021 public listing. This shareholder believes that the executives have broken the “flywheel” strategy and caused losses to investors.
Coinbase CEO May Have to Compensate Investors for Loss
Crypto exchange Coinbase is facing a derivative lawsuit from a dissatisfaction over its 2021 stock listing.
The filing alleges that Coinbase misrepresented various facts and engaged in gross mismanagement before it obtained a direct listing on the stock market in April 2021. Specifically, the filing complains that Coinbase “generated a massive influx” on its exchange through an extensive advertising campaign prior to its listing. This caused an “unprecedented spike” in activity and led to service disruptions.
This sudden growth broke the company’s “flywheel” strategy and was detrimental to investors because Coinbase attracting a large number of users would “backfired, leaving [the company] and its newfound investors damaged and vulnerable to the competition“.
In addition to those claims, the lawsuit also alleges that Coinbase’s public listing violated securities regulations. It refers to related securities action from the US Securities and Exchange Commission, which determines whether a client is authorized to trade unregistered securities.
Today’s filing targets CEO Brian Armstrong, Chief Financial Officer Alesia Haas and Account Manager Jennifer Jones. In addition, directors Fred Ehrsam, Marc Andreesen, and Kathryn Haun, Gokul Rajaram, and Fred Wilson are listed as defendants.
The case was filed with the United States District Court for the County of Delaware. Various other lawsuits have been filed against Coinbase related to its IPO over the past year, including one in New Jersey and one in the Northern District of California.
The lawsuit, if successful, could see CEO Brian Armstrong and other executives pay damages to Coinbase itself.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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