Marathon Digital management must appear in court

The board members of Marathon Digital are being sued. They are accused of violating fiduciary duties, unlawfully enriching their own pockets and wasting corporate resources.

Shareholders of cryptominer Marathon Digital have sued CEO Fred Thiel and nine other top executives of the company. In doing so, prosecutors accuse the executives of violations of U.S. securities laws, breach of fiduciary duties, involvement in lucrative insider sales, unlawful enrichment and waste of corporate resources. Quite a laundry list of charges. According to the indictment, Thiel and others artificially inflated the company's valuation, received excessive salaries and disproportionately high bonuses based on false and misleading performance. The lawsuit filed also seeks possible damages for Thiel and three other executives. In addition, the plaintiffs are demanding a restructuring of the board.

In May, Marathon received a subpoena from the U.S. Securities and Exchange Commission (SEC). The subpoena referred "including to related party transactions" that took place during the construction of a mining plant in Montana. In 2021, the SEC required the company to hand over documents related to the plant.

Marathon Digital is one of the largest mining companies in the world. Just this month, asset manager Vanguard invested $296 million in the company.