TLDR
- Genius Group filed a class action lawsuit against Citadel Securities and Virtu Americas in New York federal court for alleged market manipulation of its shares
- The complaint alleges “spoofing” and naked short selling occurred on 98% of trading days between April 12, 2022, and May 30, 2025
- The company is seeking at least $250 million in damages on behalf of itself and shareholders who sold stock at artificially deflated prices
- CEO Roger James Hamilton stated multiple brokers have restricted buying of Genius shares while allowing selling without adequate explanation
- The lawsuit represents a class action filed on behalf of all investors who sold Genius Group stock at prices allegedly manipulated by the defendants
Genius Group filed a federal class action lawsuit on Friday against two major market makers. The AI-powered education company claims Citadel Securities and Virtu Americas manipulated its stock price through illegal trading practices.
The complaint was filed in the U.S. District Court for the Southern District of New York. It alleges violations of multiple sections of the Securities Exchange Act of 1934.
The lawsuit centers on a practice called “spoofing.” This involves placing orders that traders quickly cancel to create false impressions about supply and demand.
According to the complaint, the defendants engaged in these practices between April 12, 2022, and May 30, 2025. The alleged manipulation occurred on 98% of trading days during this period.
The company claims the defendants placed thousands of orders that were canceled within milliseconds. These rapid-fire orders allegedly created false impressions of excess supply and volatility in Genius Group stock.
Genius Group is seeking at least $250 million in damages. The lawsuit represents the company and all shareholders who sold stock at what they claim were artificially deflated prices.
The complaint alleges the defendants built massive short positions through off-exchange trading. They then allegedly used spoofing trades to drive down the stock price before selling more shares short.
Trading Pattern Allegations
The lawsuit details specific patterns of alleged manipulation. Defendants would enter dozens or sometimes thousands of spoofing trades on a single trading day.
These baiting orders were typically canceled within 100 milliseconds of placement. Less than a minute after placing these orders, defendants allegedly sold large volumes of Genius stock short through off-exchange trading.
The company also alleges naked short selling occurred. This refers to short sales unsupported by existing market inventory. Major stock price declines were accompanied by large spikes in evidence of such activity, according to the complaint.
Company Response and Shareholder Actions
CEO Roger James Hamilton addressed the lawsuit in a statement. “We have been consistent in calling for fair markets and taking actions to protect our shareholders,” he said.
Hamilton pointed to current broker restrictions as ongoing issues. “Even today, multiple brokers have taken away the buy button on Genius shares while leaving the sell button,” he stated.
The company views these restrictions as targeting its stock without adequate explanation. This makes buying difficult while selling remains easy.
Genius Group reminded shareholders about its November 28, 2025 record date. Shareholders can transfer shares to the company’s transfer agent VStock through the Direct Registration System.
This relates to the company’s Bitcoin Loyalty Payment program. The program is designed to reduce shares available to short sellers by offering a $0.10 per share payment in Bitcoin to qualifying shareholders.
The lawsuit asks the court to appoint Genius Group as lead plaintiff. This would allow the company to manage the litigation and protect shareholder interests.
The class action will facilitate recovery not just for Genius Group’s losses but for all harmed shareholders. The company plans to provide updates on the case as appropriate.
Genius Group is currently valued at approximately $71 million. The stock has risen 131% over the past six months despite the alleged manipulation period overlapping with recent trading.
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