Vignesh Karunanidhi
Two international investors have filed a proposed securities class action lawsuit against Olympic gold medalist Caitlyn Jenner in California federal court.
The lawsuit is based on allegations of securities fraud and failure to register the $JENNER token offering. The lawsuit claims Jenner “fraudulently solicited financially unsophisticated investors” to purchase the meme coin.
Investors claim combined losses exceeding $50,000
U.K. citizen Naeem Azad and Romanian citizen Mihai Caluseru are leading the legal action, claiming combined losses exceeding $50,000. The plaintiffs allege that Jenner’s promotional activities misled investors and omitted crucial information about the token.
The token was launched on both Solana and Ethereum blockchains. It was initially launched through Pump.Fun, a Solana-based application designed for meme coin creation and fundraising.
According to the lawsuit, the project achieved a great early success, with trading volume exceeding $250 million and attracting approximately 20,000 investors. However, the token has since plummeted 99% from its all-time highs, with the project reportedly abandoned by Jenner.
The lawsuit identifies problematic aspects of JENNER
The lawsuit identifies several problematic aspects of the project’s management. Jenner partnered with manager Sophia Hutchins, who is named as a co-defendant, and employed Sahil Arora, an individual allegedly known for previous scams. The token’s price crashed following Arora’s sell-off, prompting a project relaunch on Ethereum that further impacted the original Solana token’s value.
The complaint alleges multiple securities law violations. Jenner allegedly failed to register the token offering and made misleading social media promotions. The lawsuit cites unfulfilled promises of exchange listings and unrealized commitments to provide buybacks. Additionally, an undisclosed 3% transaction tax was implemented on the Ethereum version, and promised donations to Trump’s 2024 campaign never materialized.
According to the plaintiffs, Jenner failed to disclose critical information to investors. This included details about insider token holdings, purchase prices for insider acquisitions, financial risks associated with the investment, and the relationship with controversial figure Sahil Arora. The investors claimed that these omissions allegedly contributed to investor losses.
The investors are represented by Fitzgerald Monroe Flynn PC, with attorney Peter Grazul contextualizing the case within a broader trend of celebrity-promoted cryptocurrency projects. Grazul emphasized that this case represents an emerging pattern of celebrities launching potentially fraudulent cryptocurrency projects under the guise of “celebrity memecoins.”
Jenner’s apparent abandonment of the coin
The complaint emphasizes Jenner’s apparent abandonment of the project, noting that she no longer actively promotes the meme coin and has left holders with substantial losses. The lawsuit suggests these losses may be irrecoverable given the token’s 99% decline from its peak value on both Solana and Ethereum networks.
The case highlights growing scrutiny of celebrity-endorsed cryptocurrency projects and raises questions about the responsibilities of public figures in promoting crypto. The legal action seeks to address what the plaintiffs describe as Jenner’s attempt to leverage her celebrity status for financial gain.
