Another shareholder lawsuit alleging dodgy accounting practices at Bitcoin treasury giant Strategy has been dropped, court documents show.
Documents filed Wednesday show the scrapped case, brought in June by shareholders Abhey Parmar and Zhenqiu Chen, had alleged breaches of fiduciary duties, unjust enrichment, abuse of control, and gross mismanagement in the company.
The dismissal comes just weeks after a different class-action lawsuit accusing the company of misleading shareholders about how new accounting rules would affect its profitability was scrapped. That lawsuit, filed in May, was similar to the June one dismissed Wednesday.
A number of law firms and stockholders this year filed lawsuits against the company, alleging securities fraud over misleading Bitcoin investment statements.
Experts told Decrypt that it wasn’t unusual for law firms to file identical lawsuits against a company, as they vied to become lead counsel in a consolidated case.
Strategy—formerly MicroStrategy—is the world’s biggest corporate holder of Bitcoin, with a stash of 638,460 digital coins worth $72.5 billion at today’s prices.
The company mainly used to sell data analysis software, but now buys and holds Bitcoin and lets investors buy shares of its Nasdaq-listed stock (MSTR) to get exposure to the cryptocurrency, dubbing itself a Bitcoin treasury firm.
Company co-founder Michael Saylor was turned on to Bitcoin in 2020, bought it, and claimed it was the best way to store value and save shareholders’ money.
Strategy stock has since soared. It was trading for $14 the day the company first bought Bitcoin in August 2020 and it’s now trading for $362—a 2,160% increase.
Strategy has in the past run into trouble with regulators. In 2000, Saylor, who was Strategy CEO at the time, co-founder and Chief Operating Officer Sanjeev Bansal, and former Chief Financial Officer Mark Lynch settled a case with the SEC, without admitting or denying charges of overstating the company’s revenue and earnings.
The three paid $10 million in disgorgement and $1 million in penalties.
