Bitcoin mining and investment firm MGT Capital will have to get its legal team in order to defend its company from price manipulations accusations from a group of shareholders.
In a lawsuit filed by Rosen Law Firm on behalf of the new owners of MGT securities who consist of company shareholders, MGT Capital CEO is accused of participating in a pump and dump scheme that manipulated MGT prices. The lawsuit against MGT Capital comes after the Securities and Exchange Commission did an investigation concerning the stock pumping scheme that involved Robert Ladd former MGT Capital CEO.
From the SEC investigations, it shows that Robert Ladd and his counterparts dishonestly manipulated the prices of MGT shares using a pump and dump technique to drive up the prices of the shares. From their activities, they were able to get more than 9.4 million dollars in 2 weeks only.
In the lawsuit, Robert Ladd is named alongside Mark Grossman, John O Rourke lll, Michael Brauser, John Stetson, Barry C Honig, Robert S Lowrey, John McAfee, and MGT Capital. From SEC Investigations 10 high-level businessmen among them executive were mentioned as participants in the manipulations team. Furthermore, the SEC investigations also mention billionaire Phillip Frost who has been using dubious means for several years to manipulate penny stock prices and has generated more than $27 million.
According to the complaint Rosen Law Firm they are accusing MGT and the others of violating four counts of the Securities Exchange Act. The four counts all involved using different techniques of pump and dump scheme to manipulate prices of shares. From the suit, the Rosen Law Firm is looking to get compensation for their clients regarding damages caused by price manipulation and the plaintiff to pay for court costs. Moreover, the aggrieved parties would like the court to order MGT to pay further relief.
Although McAfee was not implicated in the SEC investigations his association with MGT has led to him been listed as a defendant in the class action lawsuit. Among the dishonest moves carried out during Ladd’s tenure is the acquisition of a firm owned by a Cybersecurity innovator of who is almost undoubtedly John McAfee. Furthermore, McAfee has served as a CEO and executive chairman of MGT severally before his tenure came to an end in 2017.
When reached for a comment concerning the lawsuit MGT spokespersons said;-
“The lawsuit against MGT has no merit, and like previous cases logged in the same manner the current case will be thrown out by the courts.”