500.com hit with multiple federal class action suites
Several American law firms representing a reportedly large number of investors have filed a federal securities fraud class action against Hong Kong based but New York-listed online lottery firm 500.com.
The filings accuse 500.com of misrepresentation of its business practices and operations in the build up to the company's December 2013 IPO, in which it claimed that it had official approval to issue and sell lottery products in China when this was not the case.
500.com lottery sales, along with those of many other companies serving the Chinese online market, were suspended recently by provincial authorities acting on directions from the central Chinese government (see previous InfoPowa reports).
The suspensions saw 500.com shares on the New York exchange plunge to their lowest in a year, exacerbated by earlier rumours over the accounting procedures and business viability of the company.
The filings observe:
"As a result of these materially false and misleading statements and omissions as set forth above, 500.com securities traded at artificially inflated prices during the class period plaintiff and other members of the class purchased or otherwise acquired 500.com securities relying upon the integrity of the market price of 500.com securities and market information relating to 500.com, and have been damaged thereby,"
Online Casino News Courtesy of Infopowa