공지 • Oct 12
Robbins Geller Rudman & Dowd LLP Files Class Action Against Lottery.Com, Inc
Robbins Geller Rudman & Dowd LLP announced that it has filed a class action lawsuit seeking to represent purchasers or acquirers of Lottery.com Inc. f/k/a Trident Acquisitions Corp. publicly traded securities between November 19, 2020 and July 29, 2022, inclusive (the Class Period). Captioned McDonald v. Lottery.com Inc. f/k/a Trident Acquisitions Corp., No. 22-cv-1025 (W.D. Tex.), the Lottery.com class action lawsuit charges Lottery.com and certain of its top executive officers with violations of the Securities Exchange Act of 1934. Two substantially similar complaints are also pending – Million v. Lottery.com Inc. f/k/a Trident Acquisitions Corp., No. 22-cv-07111 (S.D.N.Y.), and Rogers v. Lottery.com Inc. f/k/a Trident Acquisitions Corp., No. 22-cv-00907 (W.D. Tex.). CASE ALLEGATIONS: Lottery.com is a provider of domestic and international lottery products and services that enable consumers and businesses to purchase purportedly legally sanctioned lottery tickets in the United States and abroad online. On November 19, 2020, Trident Acquisitions Corp. – a special purpose acquisition vehicle, known as SPAC or blank check company – announced that it had signed a letter of intent to combine with Lottery.com, which was then a private company. The Lottery.com class action lawsuit alleges that defendants made materially false or misleading statements and/or failed to disclose, among other things, that: (i) Lottery.com was not in compliance with state and federal laws governing the sale of lottery tickets; (ii) Lottery.com lacked adequate internal accounting controls; (iii) Lottery.com lacked adequate internal controls over financial reporting, including, but not limited to, those pertaining to revenue recognition and the reporting of cash; and (iv) as a result of the foregoing, defendants’ positive statements about Lottery.com’s business, operations, growth, and prospects were materially misleading and/or lacked a reasonable basis.On November 15, 2021, Lottery.com announced that the Board of Directors had approved the engagement of Armanino LLP as Lottery.com’s independent registered public accounting firm to audit Lottery.com’s consolidated financial statements for the year ended December 31, 2021, and the dismissal of Marcum LLP as its auditing firm. Lottery.com further disclosed that “[i]n connection with the preparation of [Lottery.com]’s financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the closing of [Lottery.com’s] Initial Public Offering, [Lottery.com] improperly valued its common stock subject to possible redemption.” Lottery.com’s quarterly report on Form 10-Q filed that day also referenced the fact that Lottery.com had identified a material weakness and determined that its disclosure controls and procedures were not effective as of September 30, 2021. On this news, Lottery.com’s stock price fell nearly 50%. Then, on July 6, 2022, Lottery.com disclosed that an internal investigation, conducted by independent counsel, had uncovered “instances of non-compliance with state and federal laws concerning the state in which tickets are procured as well as order fulfillment.” The investigation also revealed “issues pertaining to [Lottery.com’s] internal accounting controls.” Lottery.com further disclosed that, in light of the findings of the independent investigation, on June 30, 2022, the Board of Directors terminated Lottery.com’s President, Treasurer, and Chief Financial Officer defendant Ryan Dickinson. On this news, Lottery.com’s stock price fell by more than 12%. Thereafter, on July 15, 2022, Lottery.com announced that its Chief Revenue Officer defendant Matthew Clemenson had resigned. Lottery.com also revealed that it had “preliminarily conclude[d] that it has overstated its available unrestricted cash balance by approximately $30 million and that, relatedly, in the prior fiscal year, it improperly recognized revenue in the same amount” and that Lottery.com “in consultation with its outside advisors, is currently validating its preliminary conclusion, assessing any impact on previously issued financial reports, and has begun to institute appropriate remedial measures.” On this news, Lottery.com’s stock price fell an additional 14.5%. Next, on July 22, 2022, Lottery.com disclosed that it had been advised by its independent accountant that its audited financial statements for the fiscal year ended December 31, 2021 and unaudited financial statements for the quarter ended March 31, 2022 should no longer be relied upon. In addition, Lottery.com reported that CEO and co-founder defendant Anthony DiMatteo was resigning, effective immediately. On this news, Lottery.com’s stock price fell approximately 12% over the next two trading days. Finally, on July 29, 2022, Lottery.com disclosed that it did not have “sufficient financial resources to fund its operations or pay certain existing obligations,” and that it therefore intended to furlough certain employees effective July 29, 2022. Moreover, because Lottery.com’s resources were not sufficient to fund its operations for a 12-month period, it disclosed that “there is substantial doubt about [Lottery.com’s] ability to continue as a going concern” and Lottery.com may be forced to wind down its operations or pursue liquidation of its assets. On this news, Lottery.com’s stock price fell approximately 64%, further damaging investors.