- Institutional investors like Vanguard and BlackRock hold significant stakes, though it’s unclear if they will participate in the lawsuits.
- Strategy continues to acknowledge the lawsuits in SEC filings and has pledged to vigorously defend against all legal claims.
- Market-moving news hits Benzinga Pro first—get a 30-minute edge and save 60% this 4th of July.
Bitcoin BTC/USD-focused firm Strategy MSTR is now facing at least five separate securities fraud lawsuits over its Bitcoin treasury disclosures, according to court filings.
The legal actions, filed over the past several weeks, accuse the company of misleading investors about the profitability and risks tied to its aggressive Bitcoin acquisition strategy, Decrypt reported.
The lawsuits cover the period between April 30, 2024, and April 4, 2025, when the company, previously known as MicroStrategy, allegedly made public statements that plaintiffs claim were "materially false and misleading."
The initial lawsuit was filed on May 16 by Pomerantz LLP, followed by nearly identical complaints from other law firms including Gross Law Firm, Bronstein Gewirtz & Grossman, Kessler Topaz Meltzer & Check, and Levi & Korsinsky.
Legal experts say this strategy is common in securities class actions, as law firms compete for lead counsel status, which can result in significant legal fees.
"Law firms jockey for position as lead counsel in securities class actions because the fees can be very lucrative," said Adam Pritchard, a professor at the University of Michigan Law School.
Under the Private Securities Litigation Reform Act of 1995, courts typically appoint the lead plaintiff based on who has the largest financial loss.
That position holds influence over the case direction and which law firm will represent the class.
"Institutions are favored because they are likely to provide necessary oversight," explained Ann Lipton, a law professor at the University of Colorado.
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Law firms are actively promoting the July 15 deadline, after which a judge will select the lead plaintiff and consolidate the lawsuits.
It remains unclear whether any of Strategy's largest institutional investors, such as Vanguard, BlackRock BLK, or Capital International Investors, have signed on to lead the suits.
Michael Saylor, the company's co-founder and Executive Chairman, remains the largest shareholder.
The legal scrutiny intensified after Strategy disclosed nearly $6 billion in unrealized Bitcoin losses in April, warning that it might not return to profitability.
Although Bitcoin's price has since rebounded to around $107,000, the company reported a Q1 loss of $16.49 per share, following heavy Bitcoin purchases at an average price of $95,000 per coin.
Strategy has acknowledged the lawsuits in regulatory filings and said it plans to “vigorously defend against these claims.”
The company has stated that it cannot yet estimate the potential outcome or financial impact of the cases.
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