Coinspeaker
Overstock along with Its Former CEO and CFO Sued for Securities Fraud

Recently Overstock and its former CEO Patrick Byrne have recently made a lot of headlines. The main reason for that is that Patrick Byrne left the company with a big bang, sold all his equities and didn’t keep it a secret that he had invested in Bitcoin and gold.

Now, an investor from Canada – Benjamin Ha, has filed a complaint with the United States Securities and Exchange Commission (SEC) alleging that between May 9 and September 23, 2019, Overstock published “materially false and misleading statements” about the financial state of the company.

Benjamin claimed that Overstock along with its CEO and CFO had artificially inflated the price of the company’s stock. This allowed Patrick Byrne to sell all his equity at a higher stock price. Also, the increased price helped Overstock to sell off more stocks to the market in order to fund its cryptocurrency projects. Benjamin Ha noted that such a move resulted in his personal and other investors’ major losses and made them buy the stocks at “artificially inflated prices”.

So according to all this, Byrne is accused of selling his shares while he hadn’t disclosed this valuable information to other shareholders, and the former company’s CFO Gregory J. Iverson is accused of making “materially false and misleading statements”.

Moreover, the lawsuit specifically looks at two projects that Overstock had taken on in the past. This was Overstock’s trading platform tZERO and a digital currency token which was supposed to be used as an alternative way to pay dividends to shareholders. The plaintiff explained in the lawsuit that Overstock had claimed to investors that the new trading platform tZERO would bring massive benefits. And before his resigning, Patrick Byrne had arranged that the next dividends would be paid out in the digital currency token only.

The plaintiff specifically claimed in the lawsuit that this digital currency token can be viewed as a tool to create a short squeeze “by offering a digital token dividend that would not be registered and could not be resold for at least 6 months”. Also, he mentioned that the “lock-up period created by the issuance of unregistered security effectively resulted in the inability of short sellers to deliver the security upon the surrender of their shares.”

However, considering the market’s reaction to the movements of the Overstock’s stock price, it seems like the strategy has worked. Benjamin Ha noted in the lawsuit that “shares of the company spiked up from $16 to almost $27.00 per share”.

Ha says that Overstock didn’t disclose information that would have been very important to investors and that this would have lowered the stock price.

Let us also remind you that in August Patrick Byrne left his position as a CEO at Overstock. And as Coinspeaker has reported, last week he shared a letter in which he explained that he had dumped all of his Overstock equities and blamed the “deep-state” and the government for this.

“You think me controversial now, but you ain’t seen nothing yet. I know enough to fry the Deep State to ashes. The Deep State and the oligarchy are entwined, and they won’t die quietly. If I had stayed at Overstock or even remained a large owner of OSTK, they would try to break Overstock as a way of crippling me,” explained Byrne. 

Overstock along with Its Former CEO and CFO Sued for Securities Fraud

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