Recently, American Internet retailer Overstock.com became the subject of a securities class action lawsuit from stockholder Benjamin Ha. The 61-page complaint stated that Overstock, its CEO and CFO, intentionally withheld information from investors and the Securities and Exchange Commission (SEC).
Since the filing of the lawsuit towards the end of last month, several notable U.S. law firms representing Overstock investors, including Rosen Law Firm, The Law Offices of Vincent Wong, Zhang Investor Law, Levi & Korsinsky LLP and Kuznicki Law PLLC have joined the suit to apply for lead plaintiff.
The lawsuit also goes into details about how they had not disclosed their plan to offer their tZERO Preferred Share Dividend, and used it as a means to “squeeze short sellers” out of Overstock and prevent them from holding legitimate positions in the company. This knowledge could have enabled investors to foresee additional risks and substantial volatility in the price of the company’s shares.
“Defendants lacked any reasonable basis to claim that Overstock was operating according to plan, or that Overstock could achieve guidance sponsored and/or endorsed by defendants.”
It was only on the final day (September 23) that investors learned that defendant Iverson, who had only become CFO of the Company in May 2018, had abandoned his position at Overstock a full week earlier than when defendant Byrne was liquidating millions of shares of his personally held stock.
With the last date for lead plaintiff application on November 26, we may see more firms joining the suit.