Shareholder Lawsuit Filed Against Shane McMahon and Executive Team At Ideanomics
Shane McMahon has been named in a lawsuit against Ideanomics, the company which McMahon serves as Vice Chairman of the Board.
McMahon served as company director since 2010, and also served as Vice Chairman and CEO during his tenure with the company.
Ideanomics has several different divisions including commercial electric vehicles, and next generation financial services. The company owns dbot, Fintech Village, Intelligenta, Liquefy, Logistorm, and Treeletrik
The company is headquartered in New York City, and has offices in China.
The following complaint is outlined in the lawsuit
“Plaintiff Ali Toorani (“Plaintiff”), by Plaintiff’s undersigned attorneys, derivatively and on behalf of Nominal Defendant Ideanomics, Inc. (“Ideanomics” or the “Company”), files this Verified Shareholder Derivative Complaint against Individual Defendants Zheng Wu a/k/a Bruno Wu, Bing Yang, Robert G. Benya, Federico Tovar, Alfred Poor, Conor McCarthy, James S. Cassano, Harry Edelson, Steven Fadem, Jerry Fan, Shane McMahon, Jin Shi, John Wallace, Chao Yang, and Kang Zhao (collectively, the “Individual Defendants,” and together with Ideanomics, the “Defendants”) for breaches of their fiduciary duties as controlling shareholder, directors and/or officers of Ideanomics, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violation of Section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). As for Plaintiff’s complaint against the Individual Defendants, Plaintiff alleges the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through Plaintiff’s attorneys, which included, among other things, a review of the Defendants’ public documents, conference calls, and announcements made by Defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding Ideanomics, legal filings, news reports, securities analysts’ reports and advisories about the Company, and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery.”
The filing outline’s Shane McMahon’s role within the company .
“Defendant Shane McMahon (“McMahon”) has served as a Company director since July 2010. He has also served as Vice Chairman since January 2016. Defendant McMahon also served as the Company’s CEO in 2012, during which time he made a $3 million loan to the Company in consideration for a convertible note in the aggregate principal amount of $3 million at an annual interest rate of 4%. The Company has executed several amendments to extend the maturity date of the note due to McMahon, most recently to December 31, 2020. According to the 2019 Proxy Statement, as of November 15, 2019, Defendant McMahon beneficially owned 6,090,589 shares of the Company’s common stock, 5 which represented 4.5% of combined common stock and Series A stock of the Company. Given that the price per share of the Company’s common stock at the close of trading on November 15, 2019 was $0.70, Defendant McMahon owned approximately $2.1 million worth of Ideanomics stock, at least. 67. For the fiscal year ended December 31, 2017, Defendant McMahon received $339,354 in compensation from the Company. This included $20,250 in fees earned or paid in cash, $25,000 in stock awards, and $294,104 in option awards.
The Company’s 2019 Proxy Statement stated the following about Defendant McMahon: Shane McMahon* Director Since: July 2010 Age: 48 Mr. McMahon was appointed Vice Chairman as of January 12, 2016 and was previously our Chairman from July 2010 to January 2016. Prior to joining us, from 2000 to December 31, 2009, Mr. McMahon served in various executive level positions with World Wrestling Entertainment, Inc. (NYSE: WWE). Mr. McMahon also sits on the Boards of Directors of International Sports Management (USA) Inc., a Delaware corporation, and Global Power of Literacy, a New York not-for-profit corporation.
Mr. McMahon has significant marketing and promotion experience and has been instrumental in exploiting content programming on a global basis. In light of our business and structure, Mr. McMahon’s extensive executive and industry experience led us to the conclusion that he should serve as a director of our Company.”
The lawsuit provides additional details that outline Shane McMahon’s role in making misleading false and misleading statements.
“Additional reasons that demand on Defendant McMahon is futile follow. Defendant McMahon has served as a Company director since July 2010. He has also served as Vice Chairman since January 2016 and served as the Company’s CEO in 2012. Defendant McMahon has received and continues to receive compensation for his role as a director, as described above. As a longtime Company director, he conducted little, if any, oversight of the Company’s engagement in the schemes to make false and misleading statements during the First and Second Relevant Periods, consciously disregarded his duties to monitor such controls over reporting and engagement in the schemes, and consciously disregarded his duties to protect corporate assets. Furthermore, Defendant McMahon signed, and thus personally made the false and misleading statements in 2017 10-K. For these reasons, too, Defendant McMahon breached his fiduciary duties, faces a substantial likelihood of liability, is not independent or disinterested, and thus demand upon him is futile and, therefore, excused.”
You can view the full complaint below.