Overstock.com, former CEO Patrick Byrne and former CFO Greg Iverson are being sued for securities fraud.
Byrne, the controversial founding chief executive of Overstock who has long been at open war with short sellers and Wall Street at large, left the company last month amid some of the strangest circumstances and stories from a tech executive since John McAfee fled Belize.
The complaint reads:
“While shares traded to a Class Period high of $26.89 each on September 13, 2019, they traded to as low as $15.50 by September 18, 2019, three trading days later, after investors learned that the tZERO dividend was designed to be a short squeeze.”
Like an infomercial for the nascent decentralized, distributed ledger technology that underlies cryptocurrencies like Bitcoin, he waxes poetic about a future in which corruption is wiped out, people are freed from poverty and developing nations can leapfrog ahead by putting government functions like voting, property records and central banking on the blockchain.
The accusers say that the strategy used by Byrne was suspicious, claiming they enabled them to
“sell additional shares of Overstock in the market to create a cash fund necessary to support its crypto projects (in the face of them being abandoned by investment partners.)”
Byrne went on to say that in the event of an economic downturn, the value of crypto assets would rise, and he would be in a position to provide a capital injection to Overstock.
“You will have not just access to capital, you will have access to the friendliest capital imaginable: my own,”