iGaming Supplier Evolution Faces Class-Action Lawsuit in Pennsylvania

Article by : Erik Gibbs Jan 30, 2024

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Federman & Sherwood, specialists in consumer class action, have officially lodged a class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against Evolution AB, along with Martin Carlesund and Jacob Kaplan.

The complaint, submitted to the court on January 23, 2024, contends that from February 14, 2019, to October 25, 2023, Evolution engaged in the dissemination of materially false and/or misleading statements concerning both the company itself and its customers’ adherence to governing laws.

Additionally, the lawsuit asserts that the company issued misleading statements regarding its projected growth and the strategies employed to achieve that growth.

Spanning from January 24, 2022, to October 26, 2023, a series of disclosures brought to light Evolution’s actual standing concerning compliance, revenue and growth, triggering a substantial shift in the valuation of its shares.

In response to these developments, those affected sought legal counsel, culminating in the filing of a class action suit.

Alleging violations of Section 10(b) of the Securities Exchange Act and Rules 10b-5, as well as breaches of Section 20(a) of the Securities Exchange Act, the lawsuit names Evolution, Martin Carlesund and Jacob Kaplan as the subjects.

The plaintiffs are on a quest to recover damages on behalf of all Evolution investors who made securities purchases during the Class Period. Federman & Sherwood has stipulated a deadline of March 26, 2024, for investors desiring to join the legal action against Evolution.

Evolution has grappled with compliance challenges in its history, notably facing allegations of breaching US sanctions and operating in countries prohibited by the US.

The repercussions were felt in November of 2021 when these claims triggered a significant dip in the company’s stock value. As if the storm wasn’t enough, an analyst report in January 2022 hinted at potential earnings jeopardy due to looming regulatory restrictions.

The plot thickened in April 2022, as Australian regulatory authorities directed Internet Service Providers to curtail access to unauthorized online betting platforms, encompassing five Evolution clients. This, once again, cast a shadow over the company’s stock price.

The woes continued as the Swedish Administrative Court affirmed a hefty penalty on Evolution client ComeOn Group, leading to an 11% slump in Evolution’s stock value. The tumultuous journey of Evolution faced one challenge after another on the compliance front.