500.com Limited Class Action Lawsuit

Case Summary

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.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

Class Period: April 27, 2018 - December 31, 2019
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