The shareholders of the U.S.-based crypto mining company Marathon Digital have filed a lawsuit against CEO Fred Thiel and nine other senior executives based on five claims. The allegations in the lawsuit include breaching fiduciary duties, violating the U.S. Securities Exchange Act, enriching unjustly, and wasting corporate assets. The shareholders also claimed that Thiel and three other executives contributed to the U.S. Securities and Exchange Commission's (SEC) complaint against the company through their wrongful acts. - Also, the plaintiff's legal team accused the management of downplaying the company's issues, inflating Marathon's valuation artificially, obtaining excessive compensation, making profitable insider transactions, and receiving unjustifiably increased incentives based on false and misleading statements.
- The plaintiffs did not request a specific amount of compensation from the defendants, leaving it to the court.
- To correct Marathon Digital's governance, the shareholders proposed to improve the board's oversight of operations, nominate at least four shareholder candidates for the board, and eliminate the former procedure of electing directors.
Marathon Digital was served a subpoena two times by the SEC as part of an ongoing investigation related to the firm's data center facility in Montana. - The SEC mainly claims that the data center could have violated federal securities laws.
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