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A plaintiff named Anas Hamza has filed a Class Action lawsuit against Michael Saylor's Strategy and its executives on May 16.
According to the filing the plaintiff has claimed that the firm has misrepresented fundamental aspects of their Bitcoin investment strategy, which violates federal securities laws.
The lawsuit is filed against Michael J. Saylor, along with Phong Le, the President & Chief Executive Officer, and Andrew Kang, Chief Financial Officer of the company.
The case was filed by plaintiff Anas Hamza, and it is seeking damages for violations of the Securities Exchange Act, 15 U.S.C. § 78 m(a), regarding disclosures that allegedly misled investors concerning material facts.
A class action is a type of lawsuit where one or more plaintiffs can file a case on behalf of a group of people who have experienced the same harm or misstatement.
Hamza, the plaintiff, is bringing this case on behalf of other shareholders who may have experienced damage due to MicroStrategy’s disclosures or omissions regarding its Bitcoin holdings and corporate strategy.
This form of suit is often used in the context of securities fraud, where a number of investors are similarly misled by the same misinformation.
The filings include summonses to each executive named, signaling the beginning of a legal battle.
The announcement of the lawsuit quickly follows Strategy's announcement that it acquired an additional 7,390 Bitcoin for about $764.9 million at an average price of $103,498. The firm now has holdings of 576,230 BTC at a cost of approximately $40.18 billion in total.
Some critics have raised doubts about MicroStrategy's aggressive approach to acquiring bitcoin, and warned that shareholders may now be exposed to very high levels of volatility.
TheStreet's team reached out to Strategy and has not received any comments at press time.