This class action alleges that a new cryptocurrency (LGB tokens), based on the Let’s Go Brandon meme, actually consists of unregistered securities. It brings suit against a corporate defendant, known as Corporate Defendant Doe or LGBcoin and groups of individuals (the Executive Defendants, the Racing Defendants, and the Promoter Defendants). The complaint alleges they created a misleading initial coin offering (ICO) and misleadingly promoted and sold the LGB tokens investors.
The class for this action is all persons who, between November 4, 2021 and March 15, 2022, bought the company’s LGB tokens or Lets Go Tokens and were subsequently damaged thereby.
The idea behind the cryptocurrency occurred when, the complaint claims, certain people “noticed that the ‘Let’s Go Brandon’ political phrase was going viral nationally and opportunistically sought to monetize the attention for their own personal benefit.”
The complaint faults the company’s executives and celebrity promoters for allegedly (1) making false or misleading statements to investors about the tokens, via social media or promotions, and (2) disguising the amount of control they had over the company and a large portion of the available tokens (the Float).
According to the complaint, the defendants “pushed the LGB Tokens as a means of promoting the American dream” and, at the same time, talked up the prospects of the tokens and the ability of investors to gain significant returns by buying the LGB tokens.
After that, the complaint alleges, they went on to claim the tokens had favorable “tokenomics” from which those who bought the tokens would benefit. But in reality, the complaint claims, the defendants were “cynically market[ing] the LGB Tokens to investors so that they could sell off their portion[s] of the Float for a profit.”
According to the complaint, this worked. The defendants were able to drum up interest in the token and inflate its price and were then able to unload their own tokens at a profit.
The complaint alleges the tokens were unregistered securities because those who bought them “invested in a common enterprise with the expectation and understanding that the increased value of the Company and the LGB Tokens would produce a substantial return on their investment based on Defendants’ efforts.”
The complaint claims, “NASCAR approved the company and TradetheChain.com as Brandon Brown’s sponsors for an upcoming Daytona 500 race sometime around December 26, 2021.”
After that, the complaint claims, the tokens rose sharply in value for a period of time. The complaint alleges, “this meteoric rise did not last long, and the Company began to deflate immediately after NASCAR distanced itself from the prior approval of the sponsorship…” The price began falling.
The complaint alleges that the token involved a “pump and dump” scheme, and that the company even managed to execute the “pump and dump” twice, relaunching the token in February 2022.
The complaint alleges violations of the 1933 Securities Act, among other things.
Article Type: LawsuitTopic: Investments
Most Recent Case Event
LGB Token Sale of Unregistered Securities Complaint
April 1, 2022
This class action alleges that a new cryptocurrency (LGB tokens), based on the Let’s Go Brandon meme, actually consists of unregistered securities. It brings suit against a corporate defendant, known as Corporate Defendant Doe or LGBcoin and groups of individuals (the Executive Defendants, the Racing Defendants, and the Promoter Defendants). The complaint alleges they created a misleading initial coin offering (ICO) and misleadingly promoted and sold the LGB tokens investors.
LGB Token Sale of Unregistered Securities ComplaintCase Event History
LGB Token Sale of Unregistered Securities Complaint
April 1, 2022
This class action alleges that a new cryptocurrency (LGB tokens), based on the Let’s Go Brandon meme, actually consists of unregistered securities. It brings suit against a corporate defendant, known as Corporate Defendant Doe or LGBcoin and groups of individuals (the Executive Defendants, the Racing Defendants, and the Promoter Defendants). The complaint alleges they created a misleading initial coin offering (ICO) and misleadingly promoted and sold the LGB tokens investors.
LGB Token Sale of Unregistered Securities Complaint