Coinbase Insiders Lose Bid to Escape Investor’s Stock Dump Suit

Several Coinbase Global Inc. officers and directors—including CEO Brian Armstrong and board member Marc Andreessen—must face a lawsuit alleging they avoided huge losses by selling stock based on inside information before share prices took a nosedive.

The investor, Adam Grabski, is excused from a requirement that he demand Coinbase’s board pursue legal action before filing the derivative suit because such a demand would’ve been “futile,” Chancellor Kathaleen St. J. McCormick said in a Thursday opinion.

Coinbase insiders are alleged to have sold a combined $2.9 billion worth of stock in connection with the company’s 2021 public listing. Given the ...