500.com Limited Class Action Lawsuit
- Company Name
- 500.com Limited
- Stock Symbol
- Class Period
- April 27, 2018 to December 31, 2019
- District of New Jersey
On January 15, 2020, the 500.com Limited class action lawsuit was filed charging 500.com and certain of its officers with violations of the Securities Exchange Act of 1934. The 500.com class action lawsuit was commenced in the District of New Jersey on behalf of purchasers of 500.com securities between April 27, 2018 and December 31, 2019 (the “Class Period”) and is captioned Sun v. 500.com Limited, et. al., No. 20-cv-00485.
500.com, through its subsidiaries, provides online gaming services primarily in the People’s Republic of China and Europe. 500.com operates online gaming sites, such as Multilotto.com or Multilotto.net in Curacao, Malta, the United Kingdom, Ireland, and Sweden, as well as provides users with various casino services, including online slot machines and online table games.
The 500.com class action lawsuit alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding 500.com’s business and operations. Specifically, defendants failed to disclose that 500.com executives and consultants had engaged in a bribery scheme with Japanese officials in order to gain favor for an upcoming bid to run a Japanese casino resort in violation of Japanese anti-bribery laws and 500.com’s code of ethics. As a result of this information being withheld from the market, 500.com securities traded at artificially inflated prices during the Class Period, with 500.com’s share price reaching a high of more than $20 per share.
Then on December 31, 2019, despite defendants’ repeated representations that 500.com and its employees adhered to a code of ethics under which they had “an obligation to comply with all laws, rules and regulations applicable to 500.com’s operations,” 500.com announced it had formed a Special Investigation Committee (“SIC”) “to internally investigate alleged illegal money transfers and the role played by consultants following the arrest of one consultant (also a former director of 500.com’s subsidiary in Japan) and two former consultants by the Tokyo District Public Prosecutors Office.” In addition, 500.com announced that its Chairman had resigned and its CEO had temporarily stepped aside “until the conclusion of the SIC’s investigation in order to ensure a thorough and fair investigation.” On this news, the price of 500.com shares fell more than 10% to close at $7.52 per share on January 2, 2020.
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