Microsoft’s $190 Million Deal for Fungible Draws Investor Suit

A former Fungible Inc. employee sued the software maker over concerns that its leaders engineered an unnecessary financing round aimed at giving themselves a bigger piece of its planned $190 million sale to Microsoft Corp.

The lawsuit, made public Tuesday, seeks internal files from Fungible to investigate allegations that company insiders diluted public shareholders by issuing convertible promissory notes and orchestrating a related series D financing after talks with Microsoft were already underway.

The promissory notes and series D sales “appear to be an unfair and self-interested transaction intended to divert significant merger consideration from the company’s other stockholders to” ...