In January 2026, two shareholders filed a federal lawsuit against toymaker and game manufacturer Hasbro and several of its executives for manipulating the market for Magic the Gathering cards. Previously, in November 2024, a pension fund filed a federal class action lawsuit alleging that Hasbro had violated federal securities laws by making false statements that harmed the company’s stock price.
These bold claims have made usually unrelated issues intersect: a popular card game, securities law, and employment law. But what is actually being alleged, and will these lawsuits have any effect on the card game going forward?
What is Magic the Gathering?
Since 1993, Hasbro has sold Magic the Gathering (“Magic”), a popular card game originally designed by a mathematician. Although Magic tournaments range from modest to grandiose (from game shops hosting friendly tournaments to competitive tournaments with large cash prizes), the most common version of the game involves two players who create a deck of cards and play one another in a head-to-head match-up. At a simplistic level, the goal of the game is to bring the other player’s “life” total to zero by using resources (called “mana”) to play the cards in the deck.
There is an active market for playing Magic, but there is also a large market for simply collecting Magic cards, as many fans collect rare cards for potential re-sale or to hold as collector’s items. Magic only produces a certain number of cards each year, creating rarity and scarcity. Artists are commissioned to create unique images on the cards, further enhancing their value and distinctiveness.
Magic has not reproduced certain cards in decades, further driving up the value of those cards. For example, Magic produced a limited number of two cards: the Black Lotus and the “One Ring” card, based on Lord of the Rings franchise. In 2024, one collector sold a version of the Black Lotus through a private sale for $3,000,000, and in 2023, singer Post Malone bought the One Ring for $2,000,000 (Post Malone also purchased a Black Lotus signed by the original artist for $800,000).
What Are the Fraud Allegations?
A pension fund filed a class action lawsuit in 2024 (which the fund amended in November 2025) to allege federal securities fraud. Several employees acted as whistleblowers and provided statements to support the fraud allegations.
In January 2026, two plaintiffs filed a class action and a derivative shareholder lawsuit against Hasbro and several executives (including Hasbro’s CEO). The plaintiffs allege that Hasbro’s executives overprinted Magic cards from September 16, 2021 to October 26, 2023, which devalued existing cards for shareholders and impacted Magic’s brand.
The plaintiffs also relied on statements made in the securities fraud lawsuit to allege that Hasbro re-printed cards, further devaluing the value of certain cards and impacting consumer confidence. The company apparently re-printed cards as part of its 30th anniversary set, including cards that it had previously promised not to re-print. The whistleblowers allege that this strategy was referred to as "parachuting" and allege that Hasbro overprinted cards for short-term profits and to hide losses in other aspects of Hasbro’s business.
According to the 2026 lawsuit, executives publicly denied that Hasbro was overprinting cards, despite doing so. Hasbro’s share price then fell after media reports—including a report by Bank of America—indicated that Hasbro was in fact overprinting Magic cards. The lawsuit further alleges that while its share price decreased, Hasbro also had disappointing financial results. Yet prior to the fall of its stock price, Hasbro re-purchased shares of its common stock. The plaintiffs allege that this led to a significant overpayment of the company’s own stock.
What Are the Employment Law Allegations?
While the 2024 lawsuit focuses on securities fraud, the 2026 lawsuit alleges that the executives breached their fiduciary duties by making allegedly false or misleading statements regarding Hasbro’s strategy. The second lawsuit also names as defendants 14 executives not names in the prior suit.
There are several types of fiduciary duties. At a basic level, all employees owe their employer a duty of loyalty and fidelity, which prohibits employees from competing with their employer while employed, soliciting customers for a new employer while still employed, misappropriating the employer’s proprietary or confidential information, or other similar activities. Executives and corporate officers have additional duties to their employer or the shareholders, including a duty of care. Such employees must act in good faith, avoid self-dealing, and cannot act recklessly or negligently. Senior executives also may have directors’ and officers’ insurance policies given that such employees have additional responsibilities and fiduciary duties.
Through the 2026 lawsuit, the plaintiffs allege that the executives’ breach of their duties harmed Hasbro and the shareholders. In addition to seeking monetary damages, the plaintiffs seek remedial measures to impact Hasbro’s corporate governance policies.
The plaintiffs bring claims against the executives for breaches of their duties, violations of the Securities Exchange Act, unjust enrichment (i.e., personally benefiting), corporate waste, gross mismanagement, and abuse of control. Specifically, the plaintiffs allege that the executives violated their fiduciary duties by making or allowing Hasbro to make false or misleading public statements, failing to correct such statements, failing to maintain adequate internal controls, and causing Hasbro to re-purchase its common stock when the price was allegedly inflated. The plaintiffs also allege that the senior executives personally profited by receiving additional compensation tied to an inflated valuation.
This 2026 lawsuit remains in its infancy, though there are a range of potential outcomes. The named plaintiffs will likely seek to settle for a monetary amount, but the combination of the two lawsuits with different named plaintiffs may complicate a settlement for Hasbro. While the claims are interconnected, they are distinct, concerning different parties, with different claims, and in different courts.
In terms of long-term change, the plaintiffs are seeking a transformation in internal governance. Such modifications could help improve investor and consumer confidence (and potentially the stock price) by indicating that Hasbro will not reproduce rare cards. Given the popularity of Magic—and its unusual intersection with both securities and employment law—observers from various quarters will be closely following the progression of these two suits.