The Law Office of Howard G. Smith last week announced a class action suit by shareholders of Eldorado Resorts against several of the company’s senior executives, including CEO Tom Reeg, President and Chief Operating Officer Anthony Carano, Executive Chairman Gary Carano, and Director James Hawkins. The subpoenas were issued over purchases of stock from another company where Hawkins sits on the board. Hawkins is a board member for two other companies, IRadimed Corp. and OSI Systems Inc., but the subpoenas did not identify the company in question.
Although no wrongdoing is alleged at this time, the simple issuance of the subpoenas caused Eldorado stock to plunge more than 8 percent on one day, down $3.09 on the day. Eldorado is currently in the process of acquiring Caesars Entertainment for around $17 billion.
The suit claims that there has already been wrongdoing, however.
“Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects,” the suit alleges. “Specifically, Defendants failed to disclose to investors: (1) that several of the company’s executive officers, including CEO Thomas Reeg, engaged in improper trading with respect to the securities of another publicly-traded company; and (2) that as a result, Defendants’ statements about Eldorado’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.”
