Class Action SUES #strategy
#MichaelSaylor faces accusations of deception for its $21 Billion bet on Bitcoin
The law firm Pomerantz LLP, based in New York, has filed a class action lawsuit against Strategy (formerly MicroStrategy), the company led by Michael #Saylor , alleging that it violated federal securities laws.
The lawsuit accuses the company of making false and misleading statements about the profitability of its massive investment strategy in #bitcoin
The lawsuit, filed in the Eastern District Court of Virginia, represents investors of Strategy who purchased shares between April 30, 2024, and April 4, 2025. Other investors have until July 15 to join this legal action.
The main accusations revolve around Strategy allegedly:
Exaggerating the profitability of its investment strategy in Bitcoin and its treasury operations.
Minimizing the risks of volatility associated with cryptocurrency, which, according to Pomerantz, made the company's public statements "materially false and misleading".
A central point of the lawsuit is Strategy's adoption of the new accounting standards from the Financial Accounting Standards Board (ASU 2023-08), which require the accounting for fair value for cryptocurrencies. This replaced the previous "cost-less-impairment" model, which only recognized losses from price drops, but not gains until the assets were sold. Pomerantz alleges that Strategy did not adequately disclose the exact nature or scope of the impact of these new standards on its financial statements while downplaying the risks to investors.
The price of its shares has surged significantly since it focused on #BTC with a 3328% increase over the last five years.