Billionaire Mark Cuban is getting sued by Voyager Digital investors, and by the fans of his own basketball team, the Dallas Mavericks. The class action lawsuit was filed by the Moskowitz Law Firm at the US District Court in Southern Florida.
According to the suit, the billionaire promoted Voyager Digital to the Dallas Mavericks fans. The lawsuit alleges that Cuban and Voyager Digital CEO Stephen Ehrlich targeted young and inexperienced fans to put their savings into what they are now calling a Ponzi scheme.
Additionally, Cuban and Voyager are accused of repeatedly misrepresenting the platform. They allegedly said that the platform had no fees and was less expensive than its rivals. However, as per the suit, investors paid unreasonably high prices and were subject to hidden fees. All of which, allegedly, happened without the investor’s knowledge.
The lawsuit states that Cuban had said,
“I gotta add, I am a [Voyager] customer and I’ve been a customer for several months now. I like to use it, it’s easy, it’s cheap, it’s fast, and the pricing is actually really good, so we find it as a perfect fit for our Mavs fans and reaching Mavs fans of all ages.”
More woes for Voyager Digital?
In early July, Voyager Digital filed for chapter 11 bankruptcy. The firm paused all deposits, trading, and withdrawals on its platform. Additionally, the bankruptcy filing noted that there were over 100,000 creditors. The estimated assets ranged from $1 billion to $10 billion.
Moreover, on August 5th, 2022, Voyager Digital released a statement saying they would resume cash withdrawals today, on 11th August. The announcement came in after the court approved the firm’s proposal to restore users’ access to cash held at the Metropolitan Commercial Bank. The judge approved the release of $270 million in cash deposits. As per the announcement, users will receive their funds in 5-10 business days after making their requests.
Nonetheless, the relief seems to have been short-lived. Moreover, Voyager Digital had only recently announced restructuring plans, while pursuing a potential sale of the firm. It had announced that it would start taking bids from the 26th of August. Regardless, it remains unclear as to how investors would receive remuneration.