Online retailer and early Bitcoin adopter Overstock has filed for the dismissal of a lawsuit that accuses the company of misrepresenting the nature of its 'digital dividend' token.

The dividend is a security token airdrop that volition see 'OSTKO' tokens distributed to company shareholders on a basis of ane token to every x Overstock shares.

News of the dividend caused a share price surge and the lead plaintiff accuses Overstock of deliberately withholding information regarding the distribution, and of deceiving the marketplace to intentionally punish short sellers.

Overstock's digital dividend distribution is set to take place on May 19.

Overstock rejects manipulation accusations

For its part, Overstock argues the lead plaintiff in the case, The Mangrove Partners Main Fund is a "well-known curt-seller," despite challenge to be an institutional investor.

In its filing, Overstock asserts "There is no allegation that Overstock misrepresented the nature of the Dividend, or sought to hide the bear on it would take on brusque sellers."

"In fact, Plaintiff concedes that the impact was widely known and reported from mean solar day one. This alone warrants dismissal," the business firm adds.

Overstock accused of market manipulation

The consolidated suit also accuses Overstock, ex-CEO and founder Patrick Byrne, old CFO Gregory Iverson, and current retail president David Nielson of violating securities laws amid Byrne'southward sudden difference from the company and the liquidation of twenty% of his Overstock shares last yr.

The arrange claims that Overstock issued misleading year-cease predictions concerning the profitability of its security token commutation tZERO to drive up the price of OSTK shares — allowing Byrne to greenbacks out at a premium.

On top of the bullish fervor surrounding tZERO, news of the digital dividend collection the price of OSTK up over 97% during September — resulting in over $90 million in profits to Byrne, the arrange alleges.

Overstock later conceded that its previous year-end guidance was inaccurate, culminating in a serial of OSTK cost crashes.