Los Angeles, California — A legal battle continues for a group of investors who purchased Caitlyn Jenner’s self-titled memecoin. Their attorney has announced plans to pursue their claims despite a judge dismissing their initial lawsuit due to inadequate arguments regarding securities law and fraud.
The lawsuit was thrown out by California District Court Judge Stanley Blumenfeld Jr., who ruled in a motion filed on May 9 that the plaintiffs’ claims were insufficiently articulated. He indicated that all nine causes of action presented in the case lacked the necessary legal support, leading to the dismissal of the entire suit. However, the judge permitted the group to amend their complaint, requiring submission by May 23 and advising they craft a more targeted approach in their revisions.
Jack Fitzgerald, a partner at Fitzgerald Monroe Flynn PC and the attorney representing the investors, expressed optimism about the ruling. He noted that while the court dismissed the suit, it acknowledged that some claims might still be viable and that the group intends to revise its approach.
The legal actions began in November when Jenner and her manager, Sophia Hutchins, were accused of enticing inexperienced investors into purchasing the JENNER token, which the plaintiffs alleged was operating as an unregistered security. Lead plaintiff Lee Greenfield, a UK citizen, claimed he lost over $40,000 in investments tied to the token. However, the court found significant shortcomings in the claims, particularly the assertion that his purchases were not made within the jurisdiction required for securities law to apply.
Judge Blumenfeld’s dismissal extended to additional claims made in an amended complaint submitted in February. The allegations included misleading statements made by Jenner and Hutchins, as well as other forms of fraud. The judge noted that the plaintiffs failed to show that Jenner was promoting the token through a prospectus containing false information, pointing out that Greenfield himself admitted the tokens were not sold in that manner.
Further complicating the case, the court rejected claims that Hutchins aided and abetted Jenner’s alleged wrongdoing, noting that the fraud allegations did not hold up under scrutiny. While there was an ongoing debate about whether the JENNER token constituted a security, the judge refrained from making a determination at this stage, emphasizing that the core of the securities claims was flawed for other reasons.
The JENNER token was launched in May 2024 on the Solana blockchain but faced controversy when Jenner and other celebrity backers accused collaborator Sahil Arora of fraud. Subsequently, Jenner relaunched the token on Ethereum, a move that the investors claimed diminished the original token’s value while allowing Jenner to collect a transaction fee.
Since its launch, the JENNER token has dramatically lost value. It peaked at nearly $7.5 million in market value on June 3 but has since plummeted to around $58,775, with minimal trading activity in recent days.
This ongoing legal situation highlights the complexities and risks associated with investing in the volatile realm of cryptocurrencies and memecoins.
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