A Utah federal judge has reversed his own dismissal of a class-action lawsuit against online retailer Overstock that alleges it manipulated the market by issuing a security token “Digital Dividend” to shareholders last year.
On Jan. 6, Judge Kimball reversed his previous decision to dismiss the lawsuit, granting the plaintiffs’ request from October to file an amended consolidated complaint.
The class-action was filed by lead plaintiff Mangrove Partners Master Fund in September 2019, alleging that Overstock lied about the purpose of its OSTKO security token — which the plaintiffs claim was designed to “punish” short-sellers
The suit also alleged that Overstock misled investors as to the finances of its retail division and did not disclose that it had failed to secure director and officer liability insurance.
The judge previously granted motions to dismiss the lawsuit in September last year, after he found that Overstock’s security token issuance did not manipulate the market, and that the firm’s earnings statement revisions