According to Cointelegraph, a U.S. district court judge dismissed a class-action lawsuit filed by investors against Bitcoin miner Iris Energy, in which investors accused the company of concealing key risks and misleading investors during its 2021 initial public offering.
Judge Jamel Semper said in his Sept. 27 ruling that the plaintiffs failed to prove IREN had ever falsified statements or intentionally misled investors.
The lawsuit alleges that Iris Energy, its executives and underwriters, including J.P. Morgan and Citigroup Global Markets, violated securities laws and the Securities Exchange Act.
The plaintiffs claim that there were multiple inaccuracies in documents published by the Australian crypto miner during its November 2021 IPO and in the months following it.
Additionally, they allege IREN concealed the risks of loans used to finance mining rigs and made “false and misleading” statements about the company’s overall financial condition, including profits, losses, and assets.
However, Judge Semper held that Iris was not required to disclose all loan financing details and that the plaintiffs failed to prove that Iris’ disclosures were materially misleading.
Iris Energy raised $232 million through its IPO on November 17, 2021. Its stock price was $28 on its first day of listing, but then fell rapidly.
By January 24, 2022, IREN stock had plummeted 69%, mirroring a more than 36% drop in the price of Bitcoin during the same period.
On September 30, Davis Polks, the law firm representing Iris Energy and its executives, said the plaintiffs were seeking to recover their losses during the overall Bitcoin market decline in 2022.
In addition, Iris Energy was recently accused of being "overvalued" by short-selling firm Culper Research, which said it had underinvested in the high-performance computing industry.
