Coinbase Executives Sued For Allegedly Profiting From Inside Information During Public Listing
A Coinbase shareholder has filed a lawsuit against the crypto exchange’s nine executives and board members.
The stockholder alleges that the executives gained insider information during the company's public listing.
On May 1, shareholder Adam Grabski filed a stockholder derivative complaint in the Delaware Chancery Court against some executives and board members of the exchange.
The filing implicated the Chairman and CEO of Coinbase, Brian Armstrong, and some executives and board members.
The suit alleges that the top people at Coinbase profited through selling the exchange's shares using insider information.
Further, the suit mentioned that the executives of Coinbase circumvented losses of about $1 billion.
They sold many shares during the company's public listing in April 2021.
Some securities filings revealed that the defendants sold up to $2.9 billion in Coinbase shares.
Notably, they sold off the shares within a month after the company's public listing.
The filing noted that the CEO, Brain Armstrong sold $291.8 million of Coinbase shares.
Similarly, Chief Financial Officer Alesia Haas and Chief Operating Officer Emelie Choi sold shares worth $99.3 million and $219.7 million, respectively.
Fred Wilson sold the largest number of shares as compared to any other sale of his Coinbase stock.
Before Coinbase went public, Wilson held over 7% of the company's shares, and he sold shares worth approximately $1.8 billion.
The plaintiff Granski alleged that the defendants sold off their shares before “the compression of the Company’s revenue margins during the first fiscal quarter and the issuance of a dilutive convertible offering was publicly disclosed.” impacting the share price negatively.
Hence, the share price suffered over 37%
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