{"id":54668,"date":"2023-07-18T06:35:20","date_gmt":"2023-07-18T10:35:20","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=54668"},"modified":"2023-07-18T06:35:37","modified_gmt":"2023-07-18T10:35:37","slug":"marathon-digital-shareholders-file-lawsuit-against-ceo-others","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/marathon-digital-shareholders-file-lawsuit-against-ceo-others\/","title":{"rendered":"Marathon Digital Shareholders File Lawsuit Against CEO, Others"},"content":{"rendered":"\n<p><a href=\"https:\/\/coinscreed.com\/staging\/crypto-mining-and-the-environment-how-to-minimize-the-carbon-footprint.html\" target=\"_blank\" rel=\"noreferrer noopener\">Crypto mining <\/a>company Marathon Digital is facing a lawsuit from some shareholders alleging that CEO Fred Thiel and other top executives committed breaches of fiduciary duty, unjust enrichment, and squandering of corporate assets.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"535\" src=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-1024x535.jpg\" alt=\"Marathon Digital Shareholders file lawsuit against CEO, Others \" class=\"wp-image-11630\" srcset=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-1024x535.jpg 1024w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-300x157.jpg 300w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-768x401.jpg 768w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-750x392.jpg 750w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank-1140x596.jpg 1140w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank.jpg 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Marathon Digital Shareholders file lawsuit against CEO, Others <\/figcaption><\/figure>\n\n\n\n<p>On July 8, a shareholder complaint against Fred Thiel and nine other Marathon executives was lodged in Nevada's United States District Court. Five claims are being used to prosecute the company executives, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Infractions of the U.S. Exchange Act.<\/li>\n\n\n\n<li>Breach of fiduciary duties.<\/li>\n\n\n\n<li>Unjust enrichment.<\/li>\n\n\n\n<li>Waste of corporate assets.<\/li>\n<\/ul>\n\n\n\n<p>The plaintiffs are also seeking retribution against Thiel, Okamoto, Salzman, and Gallagher for their roles in the <a href=\"https:\/\/coinscreed.com\/staging\/us-sec-accepts-application-for-valkyrie-spot-bitcoin-etf.html\" target=\"_blank\" rel=\"noreferrer noopener\">Securities and Exchange Commission<\/a> (SEC) complaint filed against the company. <\/p>\n\n\n\n<p>The legal team representing shareholders did not request specific compensation from the defendants, leaving that decision to the court.<\/p>\n\n\n\n<p>The shareholders also intend to correct the company's governance by enhancing the Board's oversight of operations, nominating at least four shareholders to the Board, and eradicating the previous method of director elections.<\/p>\n\n\n\n<p>According to the legal team, the company's management has been downplaying its problems, artificially inflating Marathon's valuation, receiving excessive compensation, engaging in lucrative insider sales, and unjustifiably inflated bonuses based on false and misleading statements.<\/p>\n\n\n\n<p>In May, Marathon received a subpoena from the SEC &#8220;relating to, among other things, transactions with related parties&#8221; that took place during the construction of the Montana facility. <\/p>\n\n\n\n<p>Before that, in 2021, the regulator mandated the production of documents and communications for the same <a href=\"https:\/\/coinscreed.com\/staging\/argo-blockchain-sells-helios-mining-facility-to-galaxy-digital.html\" target=\"_blank\" rel=\"noreferrer noopener\">mining facility<\/a>.<\/p>\n\n\n\n<p>In May, however, Thiel was optimistic when he described the company's strategy for reducing its net loss from $12.9 million ($0.12 per share) in Q1 2022 to $7.2 million ($0.05 per share) this year.<\/p>\n\n\n\n<p>Despite the impact of Bitcoin's price on the company's quarterly results, Marathon reduced its debt in March. The mining company repaid a term loan with <a href=\"https:\/\/www.silvergate.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Silvergate Bank<span class=\"wpil-link-icon\" title=\"Link goes to external site.\" style=\"margin: 0 0 0 5px;\"><svg width=\"24\" height=\"24\" style=\"height:16px; width:16px; fill:#000000; stroke:#000000; display:inline-block;\" viewBox=\"0 0 24 24\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:svg=\"http:\/\/www.w3.org\/2000\/svg\"><g id=\"wpil-svg-outbound-7-icon-path\" fill=\"none\" clip-path=\"url(#clip0_31_188)\">\r\n                            <path d=\"M9.16724 14.8891L20.1672 3.88908\" stroke-linecap=\"round\"\/>\r\n                            <path d=\"M13.4497 3.53554L20.5208 3.53554L20.5208 10.6066\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\r\n                            <path d=\"M17.5 13.5L17.5 16.26C17.5 17.4179 17.5 17.9968 17.2675 18.4359C17.0799 18.7902 16.7902 19.0799 16.4359 19.2675C15.9968 19.5 15.4179 19.5 14.26 19.5L7.74 19.5C6.58213 19.5 6.0032 19.5 5.56414 19.2675C5.20983 19.0799 4.92007 18.7902 4.73247 18.4359C4.5 17.9968 4.5 17.4179 4.5 16.26L4.5 9.74C4.5 8.58213 4.5 8.0032 4.73247 7.56414C4.92007 7.20983 5.20982 6.92007 5.56414 6.73247C6.0032 6.5 6.58213 6.5 7.74 6.5L11 6.5\" stroke-linecap=\"round\"\/>\r\n                        <\/g>\r\n                        <defs>\r\n                            <clipPath id=\"clip0_31_188\">\r\n                                <rect fill=\"white\" height=\"24\" width=\"24\"\/>\r\n                            <\/clipPath>\r\n                        <\/defs><\/svg><\/span><\/a>, releasing the 3,132 Bitcoin pledged as collateral. <\/p>\n\n\n\n<p>Marathon stated then that the action would eradicate $50 million in debt and reduce its annual borrowing costs by $5 million.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto mining company Marathon Digital is facing a lawsuit from some shareholders alleging that CEO Fred Thiel and other top executives committed breaches of fiduciary duty, unjust enrichment, and squandering of corporate assets.\u00a0 On July 8, a shareholder complaint against Fred Thiel and nine other Marathon executives was lodged in Nevada&#8217;s United States District Court. [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":11630,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[710,1727,8700,370,9912],"class_list":["post-54668","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-business","tag-lawsuit","tag-marathon-digital","tag-mining","tag-shareholders-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/10\/Marathon-Digital-Holdings-receives-a-100M-credit-line-from-Silvergate-Bank.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/54668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=54668"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/54668\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/11630"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=54668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=54668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=54668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}