Lottery.com is being sued by investors for “false and misleading statements,” among other things.
Following a series of setbacks in recent months, shareholders have taken legal action, negatively impacting Lottery.com’s share price.
Lottery.com’s share price fell after President and CFO Ryan Dickinson was fired in June, as was Chief Revenue Officer Matthew Clemenson’s resignation in July.
An internal investigation revealed “instances of non-compliance with state and federal laws,” as well as “issues pertaining to the company’s internal accounting controls,” prompting the former’s departure.
Meanwhile, Clemenson’s decision to resign was exacerbated by Lottery.com’s announcement that it had “overstated its available unrestricted cash balance by approximately $30m and that, relatedly, it improperly recognised revenue in the same amount in the prior fiscal year.”
Furthermore, there was “substantial doubt about the company’s ability to continue as a going concern” because Lottery.com lacked sufficient resources to fund its operations for a 12-month period.
As a result, investors have filed a class action lawsuit, with Bragar Eagel & Squire and the Portnoy Law Firm urging anyone who purchased Lottery.com securities between November 15, 2021, and July 29, 2022, to come forward.
“Lottery.com did not maintain adequate accounting controls.” The company also failed to maintain adequate financial reporting controls, including revenue recognition and cash reporting. “The company was not in compliance with lottery ticket sales laws,” Bragar Eagel & Squire stated.
“Based on these facts, the company’s public statements throughout the class period were false and materially misleading.” Investors suffered losses when the market discovered the truth about Lottery.com.”