Coinbase Board Members Face Charges – Adam Grabski, a Coinbase investor on May 1 filed a case in the Delaware Chancery Court. He claims that Chairman Brian Armstrong and other officers used inside information to avoid losses worth more than $1 billion by selling stocks two years ago within a few days of the company’s public listings.
According to the report from Bloomberg, board member Marc Andreessen was also specifically listed alongside the CEO as part of those who profited from using inside information.
The report also stated that the stock sale happened in April 2021, a few days before bad news sent the share price “tumbling.” A Twitter post from @Pledittor shows a breakdown of this information.
9 names were listed on Security filings
The post cited Security filings which showed that CEO Brain Armstrong sold $291.8 million worth of Coinbase shares in the month after its market debut in 2021. Similarly, Coinbase COO, Emilie Choi sold $219.7 million worth as well as $99.3 million sold by the CFO Alesia Haas.
Another executive Jennifer Jones who is the chief accounting officer at the company also sold stocks worth $43.4 million. Other notable names included in the source include Marc Andreessen who sold $118.7 million worth of shares, and Fred Ehrsam who left the company 5 years ago also sold $219.5 million worth of shares.
Additionally, former Chief Product Officer at Coinbase Surojit Chatterjee sold $61.9 million worth of stocks. A board member Kathryn Haus sold off $73.5 million worth of shares.
The last name listed on the filing is a Coinbase investor, Fred Wilson who sold $1.8 billion worth of shares. Before the Coinbase market debut in 2021, Fred held over 7% of the stock.
Collectively, all these stocks were valued at over $2.9 billion and they were all sold within one month of its public listing. See the tweet below:
Within the first month after listing on the NYSE, insiders cashed out billions of dollars worth of @Coinbase $COIN stock
Among them, was $291 million from @Coinbase founder and CEO @brian_armstrong $COIN stock is down 88% since the day it went public pic.twitter.com/qfVZ1ywpeT
— Pledditor (@Pledditor) May 2, 2023
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Pledittor further points out that the Coinbase $COIN stock has been down about 88% since it first went public.
Adams’s Grabski who claims to have held Coinbase shares since April 2021 states in his lawsuit that these executives sold off their stocks before the management revealed “material, negative information that destroyed market optimism from the company’s first quarterly earnings release forward.”
In summary, he alleged that the executives were aware of the coming bad news, so they sold their stocks ahead to avoid losses.
“Within five weeks, those shares declined in value by over $1 billion, and Coinbase’s market capitalization plummeted by more than $37 billion.”
In its defense, Coinbase said in an emailed response to Bloomberg that “As the most popular and only publicly traded crypto exchange in the US, we are at times the target of frivolous litigation,” “This is an example of one of those meritless claims.”
