Shareholder Lawsuit Against Strategy Dismissed
A shareholder lawsuit against Bitcoin treasury firm Strategy has been dismissed, court records show. The case was filed in June by Abhey Parmar and Zhenqiu Chen. It alleged breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement.
This lawsuit follows a similar case from May that accused Strategy of misleading investors about new accounting rules. Multiple law firms often file similar suits to compete for lead counsel in consolidated cases. Such dismissals are common.
Strategy’s Bitcoin Holdings and Company Background
Strategy, formerly known as MicroStrategy, is the largest corporate holder of Bitcoin. It owns 638,460 coins worth about $72.5 billion. The company shifted from selling data analysis software to focusing on Bitcoin acquisition and holding. Investors can gain crypto exposure by buying its Nasdaq-listed stock (MSTR).
Co-Founder Michael Saylor began buying Bitcoin in 2020. He described it as the best way to store value and protect shareholder funds. Since the first Bitcoin purchase, Strategy’s stock price rose from $14 to $423, a 3,027% increase.
The company has faced regulatory issues before. In 2000, Saylor, Co-Founder Sanjeev Bansal, and former CFO Mark Lynch settled with the U.S. Securities and Exchange Commission (SEC). They paid $11 million in penalties over overstated revenue and earnings, without admitting wrongdoing.
Class Action Lawsuit Voluntarily Ended
Michael Saylor and Strategy’s investors recently ended a class action lawsuit accusing the company of false statements about its Bitcoin strategy. The suit was filed in May by Pomerantz LLP. It named CEO Phong Le and CFO Andrew Kang as defendants. The suit cited overstated profits and understated crypto risks.
The dismissal comes as Strategy’s Bitcoin treasury grows, now valued at around $68.5 billion. Shares have risen over 152% in the past year. The company’s growth and cleared legal challenges support its goal of becoming the largest corporate Bitcoin investor.
Also Read: Strategy Scoops up Another 1,955 BTC for $217 Million
