Paul Hastings Secures Victory in Federal Securities Class Action for Riot Platforms
September 01, 2023
After a five-year battle, Paul Hastings’ Securities Litigation team secured a huge victory for clients Riot Platforms (f/k/a Riot Blockchain), and two of its former CEOs, in a federal securities class action filed in New Jersey. Riot, a bitcoin mining company, and its executives were accused of orchestrating a pump-and-dump scheme following the bitcoin crash in 2018. Facing Section 10(b) and Section 20(a) claims after the company’s stock dropped, the team successfully moved to dismiss the action on four separate occasions, convincing three different district court judges to dismiss the case in each instance. The Court granted final dismissal with prejudice.
Along with fighting off the securities class action, the Paul Hastings team concurrently fended off a related indemnification claim brought by a Riot investor. The team not only obtained an early dismissal of the indemnification action, but also obtained attorneys’ fees and costs on behalf of Riot.
This complete victory is important as it is one of the earliest cryptocurrency-related securities class action cases filed under the Securities Exchange Act of 1934. The favorable decision provides persuasive authority and clarity on the standard that must be met for actionable public statements touting blockchain investments, as well as allegations of undisclosed insider sales.
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