Marathon shareholders file lawsuit against company’s top management
United States-based crypto mining company Marathon Digital is heading to court after its shareholders alleged that its CEO Fred Thiel, alongside other top executives, breached fiduciary duties, unjustly enriched themselves and wasted corporate assets.
A shareholder complaint against Fred Thiel and nine other Marathon executives was filed in the United States District Court of Nevada on July 8. The company executives are being sued on the basis of five claims. Among them are violations of the U.S. Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets.
The plaintiffs also demand retribution from Thiel, Okamoto, Salzman and Gallagher for wrongful acts, leading to the Securities and Exchange Commission (SEC) complaint against the company. The legal team, representing shareholders, didn’t request a specific sum from the defendants, leaving it to the court to decide on any compensation.
The shareholders also aim to correct the governance of the company by strengthening the Board’s supervision of operations, nominating at least four candidates from shareholders to the Board and eliminating the previous procedure of directors’ elections.
Related: Marathon Digital blames weather conditions for mining 21% less Bitcoin in June
According to the legal team, the company’s management has been downplaying its problems, artificially inflating Marathon’s valuation, receiving excessive compensation, making lucrative insider sales and receiving unjustifiably elevated bonuses based on the false and misleading statements.
In May, Marathon received a subpoena from the SEC, “relating to, among other things, transactions with related parties” that occurred while it was creating the facility in Montana.
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