Coinbase shareholder lawsuit over alleged insider trading allowed to proceed
A shareholder suit claims Coinbase insiders, including Armstrong and Andreessen-linked entities, sold nearly $3 billion in stock.
A Delaware judge has allowed a shareholder lawsuit accusing several Coinbase directors of insider trading to proceed, despite an internal investigation that cleared the executives of wrongdoing.
The case, filed by a Coinbase shareholder in 2023, alleges that company directors, including CEO Brian Armstrong and board member Marc Andreessen, used confidential information to sidestep more than $1 billion in losses by selling shares around the company’s public debut in 2021. According to the complaint, insiders sold more than $2.9 billion worth of stock, with Armstrong personally offloading about $291.8 million.
On Friday, Delaware Chancery Court Judge Kathaleen St. J. McCormick rejected a request to dismiss the suit following a probe by a special litigation committee formed by Coinbase, Bloomberg Law reported. While the judge noted that the committee’s findings present a strong defense for the directors, she ruled that questions surrounding the independence of one committee member were enough to keep the case alive, per the report.