McGlinchey News Release
McGlinchey Secures Judgment for ex-Overstock.com CEO in Utah District Court Securities Class ActionRead Time: 1 min
We are proud to announce that Bob Driscoll and Alfred Carry (Washington, DC) obtained a dismissal in favor of client Patrick Byrne, Overstock.com’s founder and former CEO, in a putative class action that alleged securities fraud, market manipulation, and other secondary claims.
In a 32-page decision, the court dismissed with prejudice a securities class action that The Mangrove Partners Master Fund Ltc. filed against Overstock and other named individual defendants, including Byrne. Mangrove alleged that Overstock, an online home furnishings retailer, had misled investors about publicly broadcasted company information, search engine optimization (SEO) practices, and a digital dividend it issued in 2019.
Mangrove originally filed the class action in September 2019. While the court dismissed the first complaint, it permitted Mangrove to file an amended pleading.
Specifically with regard to Mangrove’s claims against Byrne, District Court Judge Dale A. Kimball wrote that “the court concludes that Plaintiff still fails to plead that Byrne’s statements about SEO were false or misleading. The AC [amended complaint] contains no well-pled facts that are inconsistent with Byrne’s statements regarding SEO. Accordingly, the court dismisses Plaintiff’s SEO misrepresentation claims.”
In addition, Judge Kimball wrote, “Plaintiff’s argument that Defendants allegedly failed to disclose Byrne’s intent to sell stock at some point in the future also fails to render the dividend deceptive. The law only requires executives to disclose stock sales two business days after they happen.”
“We are incredibly pleased that Judge Kimball rejected Mangrove’s unfounded claims, and that we were able to obtain this ruling for a great client,” Bob said.