Evolution faces class-action lawsuit based on securities fraud allegations

Live casino giant accused of unlawful business practices in lawsuit filed by US firm Pomerantz relating to four-year period
The post Evolution faces class-action lawsuit based on securities fraud allegations first appeared on EGR Intel.  

A class-action lawsuit has been filed against Evolution accusing certain officers and/or directors of engaging in securities fraud as well as other unlawful business practices.

The lawsuit, which was filed by US law firm Pomerantz, lists several instances where Evolution’s share price dropped dramatically over the past two years following news stories across the world and the release of financial results.

The alleged offences relate to a class period between 14 February 2019 and 25 October 2023, with a motion deadline having been set of 25 March.

Pomerantz has urged Evolution investors who acquired shares in the supplier during the class period to contact the law firm should individuals desire to be named a lead plaintiff in the suit.

In a press release published by Pomerantz, the law firm, which has offices in the US, Europe and Israel, detailed a timeline of Evolution’s share price movement in relation to regulatory action, investor reports and financial disclosures related to Evolution.

The first of these instances saw Evolution’s American Depositary Share (ADS) drop $19.78 after Analyst Alpha Generation Limited released a report on the live casino giant on 24 January 2022.

The report, which was given to certain investors of the firm, stated that revenue “could be at risk due to future regulatory clampdowns” and the firm was “exposed to revenues from what we [the authors of the report] believe to be illegal gambling activities”.

The ADS closed at $115 on 27 January 2022, following the publication of the report.

Another incident, which occurred on 26 April 2022, involved the Australia gambling regulator’s announcement that six online gambling sites should be blocked by the Australian internet service providers.

Five of these six operators were direct or indirect customers of Evolution, and were alleged to have engaged in illegal gambling. This lead to the firm’s ADS falling by $6.02 over the next two trading sessions and closing at $96.73 on 27 April 2022.

Then, in May 2022, a news report claimed industry participants had lobbied against the UK government when it came to overhauling UK gambling laws.

Following the report, Evolution’s ADS fell $14.84 over three trading sessions, closing at $87.25 on 11 May 2022.

The final incident raised by Pomerantz concerned Evolution’s Q3 report released on 26 October 2023, which saw the firm disclose in its analyst call that it faced delays in opening new studios.

The supplier also announced revenue for its RNG arm in North America had not grown, leading to a $7.15 ADS drop over two trading sessions. Shares closed at $86.80 on 27 October 2023.

Evolution’s share price, at the time of writing, were down 0.64%.

The filing from Pomerantz becomes the latest lawsuit Evolution has faced recent years.

In January this year, litigation firm Federman & Sherwood named Evolution CEO Martin Carlesund and CFO Jacob Kaplan as defendants in a class action lawsuit regarding “misleading statements” which led to “significant change” in the supplier’s share price.

The Federman & Sherwood allegations match the timeline cited by Pomerantz, with the lawsuit relating to three core reporting aspects from the Stockholm-listed firm.

In 2021, the firm were accused of operating in several illegal markets and in countries subject to US sanctions.

However, the New Jersey Division of Gaming Enforcement ruled in February that no further action would be taken following a two-year investigation into the latter accusation.

EGR has approached Evolution for comment on the latest lawsuit filing.

The post Evolution faces class-action lawsuit based on securities fraud allegations first appeared on EGR Intel.

 

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