Lawsuit Accuses Coinbase Executives of Insider Trading to Avoid Losses
A Coinbase investor, Adam Grabski, filed a lawsuit in the Delaware Chancery Court, alleging that certain Coinbase executives and board members used inside information to avoid losses from Coinbase stock sales. The suit named Coinbase Chairman and CEO Brian Armstrong, board member Marc Andreessen, and other executives as those profiting from selling Coinbase shares using insider information, avoiding losses of about $1 billion by selling within days of the firm's public listing in April 2021. Securities filings show Armstrong sold $291.8 million worth of Coinbase shares within one month of the firm going public, while Emelie Choi, the COO of Coinbase, and Alesia Haas, the CFO, separately sold $219.7 million and $99.3 million, respectively, during the same period. The biggest stock sale was carried out by Fred Wilson, a Coinbase investor who unloaded stocks worth $1.8 billion. The lawsuit alleges that these executives sold off their stock before the management revealed "material, negative information that destroyed market optimism from the company's first quarterly earnings release forward."