Strategy investors drop class action alleging Bitcoin treasury company misled them
Quick Take
- Strategy investors decided to end their class action lawsuit that claimed the Bitcoin treasury company had made false and misleading statements about its investment strategy.
- The investors also alleged that Strategy failed to adequately disclose the impact of adopting new accounting standards.
Strategy investors decided on Thursday to end their class action lawsuit that claimed the Bitcoin treasury company had made false and misleading statements about its investment strategy.
The investors also alleged that Strategy failed to adequately disclose the impact of adopting new accounting standards. Co-founder Michael Saylor, CEO Phong Le, and Chief Financial Officer Andrew Kang were all listed as defendants.
Bloomberg was first to report news of the dismissal on Friday.
New York-based law firm Pomerantz LLP filed the class action lawsuit in May with the Eastern District Court of Virginia. Pomerantz invited other investors to join the class action suit.
The lawsuit specifically alleged that Strategy overstated the profitability of its bitcoin investment strategy and treasury operations, while downplaying volatility risks associated with bitcoin.
The lawsuit also took issue with Strategy's adoption of the Financial Accounting Standards Board's accounting standards that require fair value accounting for crypto assets. Pomerantz claimed that Strategy failed to properly disclose the exact nature or scope of the impact of the new accounting standards on its financial statements, while downplaying risks to investors.
As of Monday, Strategy held about $68.5 billion worth of Bitcoin. The company's shares are up over 150% in the past year, according to The Block MSTR price page.
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