Andreessen Horowitz, an affiliate of Bain Capital, and several other venture capital firms have petitioned a California federal judge to reevaluate his decision not to dismiss a proposed class action. The lawsuit alleges they assisted a decentralized crypto organization in selling unregistered securities. They argue that the plaintiffs previously informed the court that they no longer intend to pursue what are known as “direct liability” claims against the firms.
In December 2022, two individual investors filed a lawsuit asserting that they had acquired unregistered securities from an entity known as the Compound Decentralized Autonomous Organization (DAO). They claim that this entity, allegedly funded by the venture capital firm defendants, sold them these securities. In September, U.S. District Judge William H. Orrick rejected the firms’ motion to dismiss the lawsuit, citing a failure to demonstrate that they were not actively involved in promoting the sale of the DAO’s assets.
Five investment firms, including the venture capital division of private equity giant Bain Capital, and investment firms Polychain Alchemy LLC, AH Capital Management LLC, Paradigm Operations LP, and Gauntlet Networks Inc., have filed motions on Friday and Monday, contending that since the investors have abandoned their direct liability claims, the court should revisit its decision.