Global retailer Overstock has filed for a dismissal of a lawsuit that alleges the company is misrepresenting a “digital dividend” token to its shareholders.
Accused On Misleading Information To Shareholders
The online retailer Overstock has been among the firms that adopted and advocated Bitcoin early on. Now the company is caught in a legal battle, accused of spreading misleading information in representing the essence of its new digital token to its shareholders.
The so-called OSTKO security tokens were supposed to be released on May 19 and ought to be distributed between shareholders, respectively, one token for every ten company shares.
Now, however, there’s an accusation that the announcement has caused a serious price outburst because Overstock has allegedly withheld information about the distribution.
Rejecting The Accusations
The company argues that The Mangrove Partners Master Fund is rather a “well-known short seller” than an institutional investor. Overstock claims that there is no misleading or misrepresented information on the nature of the Dividend they offer or any intentional plan to hide the impact it could’ve had on the market.
The company adds that this influence was specified from “day one,” using it as the main reason for the lawsuit dismissal.
Violating Securities Laws
Overstock is also being accused of violating securities laws. The reason – last year’s unexpected departure of ex-CEO and founder Patrick Byrne from the company, and the subsequent liquidation of 20% of his Overstock shares for that matter. These allegations also concern former CFO Gregory Iverson and current retail president David Nielson.
It claims that Overstock has released misleading data and year-end predictions on the profitability of its security token exchange tZERO to boost the price of OSTK shares, helping ex-CEO Byrne to walk away with a considerable premium.
Overstock has been a well-known Bitcoin proponent for quite some time. In fact, it not only accepts BTC as a payment method but also paid some of its Ohio state business taxes using Bitcoin through the state’s cryptocurrency taxpayer platform.
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