Caitlyn Jenner Memecoin buyers regroup after judge dismisses lawsuit

Source: Cointelegraph Original text: "Caitlyn Jenner Memecoin buyers regroup after judge dismisses lawsuit"

The lawyer representing the buyer group of the Caitlyn Jenner meme coin stated that they will continue the legal battle against the former Olympian, after a judge dismissed the case due to the plaintiffs' failure to adequately substantiate the securities and fraud allegations.

Jenner successfully escaped a class-action lawsuit brought by buyers of her namesake meme coin Caitlyn Jenner (JENNER). California District Court Judge Stanley Blumenfeld Jr. stated in a ruling submitted on May 9 that "it is sufficient to find that all nine causes of action are defective" and supported Jenner's request to completely dismiss the lawsuit on the grounds that the plaintiffs failed to present valid claims.

The judge allowed the plaintiff group to amend the complaint, requiring it to be submitted by May 23, but warned that the amended complaint must "be more focused and carefully worded than the original complaint."

Jack Fitzgerald, a partner at Fitzgerald Monroe Flynn PC representing the plaintiffs collectively, told Cointelegraph that they "are pleased the court recognized that we may be able to make certain claims against the defendants and plan to amend the complaint to continue pursuing this case."

Jenner and her manager Sophia Hutchins were sued last November by a group of investors who purchased JENNER tokens, accusing them of "fraudulently soliciting financially immature investors" to buy the tokens, with the plaintiffs claiming that the tokens are actually unregistered securities.

UK citizen Lee Greenfield was named as the lead plaintiff in January this year, claiming to have lost over $40,000 from purchasing JENNER. However, the court initially found that the securities law violation claim could not stand because the plaintiff failed to specify that his purchase of JENNER occurred in the United States (as required by law), and the details provided about these transactions were "extremely sparse."

The court does not allow the plaintiffs to collectively replace their lead plaintiff with members from the U.S. mainland and requires a report on how the lawsuit will proceed by May 16 (highlighted for emphasis). Source: PACER

Overall, Judge Blumenfeld dismissed the additional eight allegations made by the plaintiffs in the amended complaint submitted in February, which included misleading statements made by Jenner and Hutchins, the sale of unregistered securities, or the commission of various fraudulent activities.

Judge Blumenfeld pointed out that the plaintiffs failed to prove that Jenner sold tokens through a prospectus containing false statements, because "Greenfield has admitted that the $JENNER tokens were not sold through a prospectus."

The court simultaneously dismissed the common law fraud allegations, stating that the plaintiff only mentioned issues of information omission and Jenner's statement on platform X that "will continue to support these tokens," but did not specifically identify which particular statements were related to the fraud allegations.

The plaintiff also accused Hutchins of aiding and abetting Jenner's alleged fraudulent activities, but Judge Blumenfeld ruled that the allegation was unfounded, stating that the complaint "failed to adequately prove any credible fraud allegations."

In a note, Judge Blumenfeld stated that Jenner and the class action plaintiffs have a dispute over whether the JENNER token constitutes a security, but he will not make a ruling at this stage because "the securities-related claims have been dismissed for other reasons."

"Since determining whether a token constitutes a security requires a factual analysis and may be influenced by the amended complaint, the court will not resolve this issue at this time, but will assume that these tokens are subject to federal securities laws without making a final ruling," the judge wrote in the ruling.

The JENNER token was initially issued on the Solana blockchain through Pump.fun in May 2024, but soon fell into controversy, with Jenner and other celebrities who issued meme coins claiming that partner Sahil Arora had defrauded them.

Jenner subsequently reissued the token on the Ethereum blockchain, with the class action plaintiffs claiming that this action caused the original Solana version of the token to plummet in value, while allowing Jenner to collect a 3% fee from each transaction.

Since its issuance, the JENNER token has essentially lost all its value. According to CoinGecko, its market cap has fallen from nearly $7.5 million on June 3 to about $58,775. The trading volume of the token in the past 24 hours was only $61.10.

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