An investor has filed a complaint in Utah’s district court accusing Overstock and two former executives of securities fraud.

Filed on 27 September by Benjamin Ha on his and other investors’ behalf, the complaint alleges that Overstock, the company’s former CEO Patrick Byrne and former CFO Greg Iverson published “materially false and misleading statements” regarding the company’s financial state between 9 May and 23 September.

The alleged false claims, the complaint continues, allowed the company’s stock to be artificially inflated, which let Byrne sell all of his shares at unrealistic prices.

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The document also claims that Overstock used its unusual crypto shareholder dividends, which are a digital security that was issued by its subsidiary tZERO, to punish short sellers.

The dividend, called “Digital Voting Series A-1 Preferred Stock”, was to be locked up for six months, which would make short positions impossible to maintain for short sellers. The complaint states:

“While defendant Byrne had previously, at different times, launched into public tirades over short selling and naked short selling, the tZERO Dividend was his secret plot to finally obtain hegemony over them — and it almost worked.”

The document also explains the mechanism of tampering with the stock’s price:

“While shares traded to a Class Period high of $26.89 each on September 13, 2019, they traded to as low as $15.50 by September 18, 2019, three trading days later, after investors learned that the tZERO dividend was designed to be a short squeeze.”

According to a publication from MarketWatch, Byrne was able to sell his 13% share in Overstock in the days leading to 18 September. When 18 Semptember came, the company announced that it will be restructuring the dividend in order to end the lockup, and allow the shares to be freely traded.

Iverson left his position in the company on 17 September, while Byrne resigned his position as CEO on 22 August, claiming that it was due to the scandal of his relationship with an alleged Russian spy.

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