Learning about the unavailability of the Tezos project to use raised funds effectly, a group of investors led by Andrew Baker filed a collective lawsuit against the company and several related organizations. This is reported by the Croudfundinsider.
As a result of a public conflict between the founders of Tezos Kathleen and Arthur Breeithman and the chairman of the non-profit organization Tezos Foundation, Johannes Gevers, it became known that the company was not ready to use the raised amount for the right purpose. Since the summer of this year this amount has increased from 230 to 400 million dollars.
In this regard, plaintiff Andrew Baker, represented by a law firm from San Diego Taylor-Copeland, filed a class action lawsuit against the Breitman, PR firm Strange Brew Strategies, Dynamic Ledger Solutions and the Tezos Foundation in the California Supreme Court.
The plaintiff puts forward the following charges:
- the sale of unregistered securities,
- fraud when offering and selling securities,
- misleading advertising,
- unfair competition,
- fictitious obligations.
Baker claims that he decided to invest in Tezzies tokens on the basis of false information provided by the founders of the project. He intends to seek compensation for himself and other investors.
While the debate rages on the issue of whether – and under what circumstances – a “Token” is a security under US securities laws – the plaintiffs’ class action securities bar has quickly stepped in to fill this vacuum – at the courthouse filing window of course. But do not expect any “bright line” tests to come out of this litigation. In my experience in testifying in state securities law proceedings, most state court judges are (admittedly) inexperienced in securities laws. Couple this with a sympathetic plaintiff (an investor who has lost money), and I expect that the resulting decision may be unsatisfying to many of us in the securities bar and the ICO ecosystem who have been wrestling with this issue.
Prominent securities attorney
It is worth reminding that Tezos tokens lost about 75% of its price in few hours due to abovementioned inner conflict. Investors had already started an investigation, but Tezos founders claimed that everything is going great and developent continues.
We weren't able to find any official statements of Tezos team their website or official social media accounts.