Mark Cuban, Dallas Mavericks, Stephen Ehrlich Face Class Action Over Alleged Voyager Digital ‘Ponzi Scheme’ [UPDATE]
by Erin Shaak
Last Updated on June 28, 2024
Robertson et al. v. Cuban et al.
Filed: August 10, 2022 ◆§ 1:22-cv-22538
A lawsuit claims Mark Cuban and Stephen Ehrlich misled Americans into investing their money into the Voyager cryptocurrency platform before it filed for bankruptcy.
Florida
June 28, 2024 – Judge Preliminarily Approves $2.4M Settlement from Voyager Crypto Promoters
A federal judge has granted preliminary approval to a $2,425,000 settlement between Voyager promoters Robert Gronkowski, Victor Oladipo, Landon Cassill and millions of individuals who invested in the cryptocurrency platform.
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The nine-page preliminary approval order, signed by U.S. District Judge Roy K. Altman earlier this month, specifies that the deal covers any persons or entities in the United States who, from October 23, 2019 to June 10, 2024, enrolled in a Voyager Earn Program Account or purchased VGX Tokens.
As part of the deal, Gronkowski has agreed to pay $1,900,000, Oladipo $500,000, and Cassill $25,000, court documents state.
According to court documents, funds from the Voyager promoter settlement will be combined with any future deals that may be reached with non-settling defendants Mark Cuban and the Dallas Mavericks. Payments will be distributed to eligible individuals if, and when, the settlements receive final approval from the court, and after any appeals are resolved.
Class members won’t receive formal notice of the deal until after claims against the remaining defendants are resolved, court documents say. Judge Altman wrote in the preliminary approval order that this is “the most practical path forward” since sending notice of all the class action settlements at once at the end of the litigation will be more cost effective.
ClassAction.org will update this page when more Voyager settlement details are available, so be sure to check back often.
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May 2, 2024 – Crypto Promoters Oladipo, Gronkowski, Cassill Agree to Settle Voyager Lawsuit
Three Voyager promoters—including NBA player Victor Oladipo, former NFL star Rob Gronkowski, and NASCAR driver Landon Cassill—have agreed to settle the proposed class action lawsuit detailed on this page.
Are you owed unclaimed settlement money? Check out our class action rebates page full of open class action settlements.
Court documents reveal that, as part of the proposed deals, the defendants will pay “millions of dollars in relief” to eligible Voyager investors, although the class has not yet been certified.
A joint status report filed on February 16, 2024 says the plaintiffs discussed a possible class action settlement with defendants Mark Cuban and the Dallas Mavericks, but “[n]o resolution was reached,” and the parties remain “far apart.”
ClassAction.org will update this page when more settlement details are available, so be sure to check back often.
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A proposed class action lawsuit has been filed against "Shark Tank" personality and billionaire entrepreneur Mark Cuban and Voyager Digital CEO Stephen Ehrlich over allegations that they misled millions of Americans into investing their money into the Voyager cryptocurrency platform before it filed for bankruptcy in early July.
The sprawling 92-page lawsuit, which also names as a defendant the NBA’s Dallas Mavericks, of which Cuban is the owner, says the defendants have used their positions as experienced investors and Voyager’s partnership with the Mavericks to target young and inexperienced investors and entice them into putting their money into what the complaint describes as a “massive Ponzi scheme.” According to the suit, though the defendants represented that Voyager investors would “reap[] large profits in the cryptocurrency market,” they were essentially soliciting consumers’ purchase of unregistered securities.
Per the suit, over 3.5 million Americans “have now all but lost” more than $5 billion in cryptocurrency assets, with Voyager filing for Chapter 11 bankruptcy protection in early July.
The lawsuit says Cuban and the Mavericks’ “very public support” of Voyager, a multi-billion-dollar mobile app cryptocurrency investment service, were essential in fueling the platform’s success and enticing millions of investors into purchasing Voyager Earn Program Accounts (EPAs). According to the case, Cuban “shamelessly” touted Voyager as “an attractive investment for novice investors who might only have $100 to start” and claimed the platform was “as close to risk free as you’re going to get in the crypto universe,” among other representations.
Per the suit, although Voyager was advertised as “100% Commission-Free,” this representation was misleading given users were never told that Voyager intentionally set its prices higher than competitors so as to collect “exorbitant hidden commissions” on every trade.
Ehrlich also misrepresented the company’s FDIC-insured status, the lawsuit says, by stating that assets held in the Voyager platform were as “safe” as if they were in a bank, among other representations. According to the case, these statements caused officials from the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve to warn Voyager in a letter dated July 28, 2022 that its claims “likely misled and were relied upon customers who placed their funds with Voyager and do not have immediate access to their funds.” The letter demanded that Voyager remove the offending statements from its website and social media accounts.
Quoting another proposed class action filed by the plaintiffs’ counsel in December, the complaint says the Voyager platform is, in reality, “a house of cards, built on false promises and factually impossible representations that were specifically designed to take advantage of the cryptocurrency craze to the direct detriment of any ordinary investor.”
After the December lawsuit was filed, the Securities and Exchange Commission (SEC) began looking into whether Voyager’s EPAs are unregistered securities, the complaint relays, and the attorneys general of seven states took “specific action” against the company indicating its sale of EPAs violated their states’ securities laws.
According to the case, the defendants made misleading representations about Voyager while “knowing full well they were false” in order to keep the company afloat by gaining new investors. The lawsuit compares their efforts to a Ponzi scheme:
“Before filing for Chapter 11 bankruptcy, just like Scott Rothstein did in his infamous Ponzi scheme, it was a necessary element, to continue to persuade, influence and convince the common investor, as cash was getting scarce, to continue to put their earned money (sometimes life savings) into specifically the Deceptive Voyager Platform. To do this, Stephen Ehrlich, CEO and founder of Voyager, made a plethora of false and misleading public statements that were broadcast around the country through the internet, and enlisted the help of Mark Cuban to do the same, who also invested his own money into the Deceptive Voyager Platform for this purpose.”
According to the case, although Cuban disclosed the Mavericks’ partnership with Voyager, he has never revealed the full extent of his personal involvement in promoting the platform and the amount of compensation he’s received. The lawsuit argues that a failure to disclose this information is considered to be a violation of the anti-touting provisions of federal securities laws.
The suit looks to represent all persons or entities in the U.S. who purchased or enrolled in an EPA within the applicable statute of limitations period.
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