Internet gaming supplier Evolution Gaming Group is facing a class-action lawsuit on behalf of investors claiming the company misled investors by downplaying its regulatory risk between February 2019 and October 2023.
The case, filed by consumer class-action specialist Federman & Sherwood, claims Evolution’s misleading statements were not in compliance with U.S. law.
Evolution CEO Martin Carlesund and CFO Jacob Kaplan are both named as defendants in the complaint, which outlines how regulatory pressure has affected the live casino supplier’s share price and revenue over the four-year period.
“From January 24, 2022 to October 26, 2023, a number of disclosures revealed the truth of Evolution’s compliance, revenue, and growth, and brought to light the falsities behind defendants statements,” said Federman & Sherwood in a statement.
“As a result, Evolution saw a significant change in the value of its share prices. The complaint alleges violations of Section 10(b) of the Securities Exchange Act and Rules 10b-5 promulgated thereunder, and violations of Section 20(a) of the Securities Exchange Act.”
Federman & Sherwood is seeking damages on behalf of any investor who purchased Evolution securities during the period named in the suit.
The firm gave investors a March 25 deadline for any who wish to participate in the legal action.
Evolution has faced allegations in recent years of breaching U.S. sanctions by having its products available in countries blacklisted by the U.S.
In November 2021, the business was accused by an unnamed competitor of operating illegally in such markets. The allegation caused a $3 billion drop in Evolution share prices. A subsequent report by analyst Alpha Generation Limited said “a significant portion” of the supplier’s revenue could be at risk from future regulatory clampdowns.
