Shareholders Allege Deceptive Practices By In New Lawsuit

Written By Derek Helling on August 24, 2022 - Last Updated on August 25, 2022 lawsuit us online gambling

The potential downfall of a once rising US online gambling company continues to play out right before the eyes of investors. Some of the investors in are not content to passively watch the carnage, however.

On Tuesday, became the defendant in a potential class-action lawsuit that alleges the company’s leadership deceived investors and their improper conduct led to shareholders’ financial losses. Other bad news for the company came almost simultaneously.

A dark day for US online gambling company

On Tuesday, NASDAQ informed, an online lottery ticket courier service, that it is out of compliance with the market’s quarterly report mandate. NASDAQ requires all companies listed on its exchange to file reports for the second quarter of each calendar year by June 30. says it has not yet filed its report because it “has not yet finalized its reviews of its financial statements or its assessment of the impact of the findings of the ongoing review of the Company’s internal accounting controls on its historical financial statements or for the financial statements for the quarter ended June 30, 2022.”’s statement does not provide any kind of timeline for the completion of the report. NASDAQ warned that further sanctions could be coming if does not file the report by Aug. 31.

Currently, that’s just one of the company’s worries, though. It has another big problem that surfaced on Tuesday as well.

Particulars of the lawsuit

On Aug. 19, lead plaintiff Preston Million filed his complaint in the federal court for the Southern District of New York. Along with, he named Trident Acquisitions Corp., Matthew Clemenson, Anthony DiMatteo, and Ryan Dickinson as defendants. On Tuesday, the court issued a summons for the defendants. went public in October of 2021. Trident is a blank check company (a company that has no actual product or service and only exists to acquire or merge with another company) that merged with in December of 2020.

DiMatteo is’s CEO. Clemenson and Dickinson are former executives with the company, both either being fired or quitting in July 2022. Million says he purchased shares of the company and the class he proposes will include all groups or people who purchased stock in between Nov. 15, 2021, and July 29, 2022.

As the termination dates of Clemenson and Dickinson’s employment with the company suggests, July was a significant month for Significantly poor, that is.

Things started to unravel for in July

On July 6, filed a Form K-8 with the United States Securities and Exchange Commission. That body regulates stock markets and a K-8 Form is essentially a form that publicly traded companies must file with the Commission whenever an event that is of interest to shareholders happens.

While not all K-8 filings always mean bad news, as sometimes it’s simply as mundane as a promotion of a new executive, this filing did not represent good news to anyone. The document stated that an audit of uncovered “instances of non-compliance with state and federal laws concerning…order fulfillment” and “issues pertaining to the Company’s internal accounting controls.”

That was when the Board of Directors fired Dickinson and less than two weeks later, Clemenson resigned. On the same day Clemenson quit, another K-8 shared that actually had $30 million less in cash on hand than it had previously stated and it had a corresponding amount of “improperly recognized revenue.” But wait, there’s more.

On July 29, a third K-8 plainly stated lacked “sufficient financial resources to fund its operations or pay certain existing allegations.” Throughout all this activity, prices of LOTR fell from $1.22 per share on July 5 to just $0.29 per share on July 29.

Million’s lawsuit states that since went public, it has lied about its accounting and compliance practices, swaying investors to fund a company that was incompetent. The complaint alleges the diminishing stock price is due to not only poor practices but that lower stock price represents a financial loss for investors.

Considering this lawsuit and the NASDAQ notice, Tuesday was just about as bad of a day as any public company has ever had. There are some more painful days ahead, however, as the remaining leadership tries to navigate the issues.

Photo by PlayUSA
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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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