The head of one of the largest miners in the United States was accused of embezzlement
Date: 2023-07-19 Author: Karina Ziganova Categories: BUSINESS
The head of one of the largest miners in the United States, Marathon Digital, Fred Thiel, has faced a lawsuit from investors who accuse him of unfair enrichment and misuse of corporate assets
The document mentions Thiel and nine top executives of the company. In total, they were charged with five lawsuits, including violations of the US Securities Exchange Act, breach of duty, undue enrichment and squandering of corporate resources.
Shareholders' lawyers point out that Marathon's management is accused of underestimating the company's problems, artificially inflating the miner's valuation, receiving disproportionate remuneration, participating in profitable insider trades and embezzling bonuses based on false and misleading statements.
Solution to the problem
However, the exact amount of damage is not indicated. Instead, investors ask the court to determine the amount of compensation on their own. They also ask the defendants to compensate for the losses incurred by the miner due to the complaint of the US Securities and Exchange Commission (SEC), and to carry out corporate governance reforms of Marathon Digital.
As a possible reorganization, they propose to strengthen the oversight of the board of directors over the company's activities, appoint at least four representatives of shareholders to the board and revise the existing procedure for electing directors.
Marathon Digital's Tough Year
For Marathon, 2022 turned out to be quite unprofitable. For the whole of 2022, revenue was $117.8 million, down 26% from 2021. The miner's net loss amounted to $686.7 million, moreover, in the fourth quarter of last year, the company's revenue collapsed by 58%.
However, this did not prevent the miner from increasing the volume of bitcoin (BTC) mining. In May, Marathon Digital mined 1245 BTC, which is 77% more than last month. This growth was due to an increase in hashrate and transaction fees, which amounted to approximately 11.8% of the total amount of mined bitcoin. In addition, in May, the company continued to transfer and connect new devices at its facilities in North Dakota.
