Two law firms have reached out to shareholders of Lottery.com to come forward with their losses ahead of a class action lawsuit over recent revelations and controversy at the company.
Shareholder rights law firm Johnston Fistel LLP, has commenced a class action lawsuit on behalf of Lottery.com investors who bought shares between November 15, 2021 and July 29, 2022.
Meanwhile, The Schall Law Firm has brought forward action for shareholders during the same time period, but is calling on those who lost over $100,000 to come forward.
The two firms published an explanation of the lawsuit, claiming: “According to the Complaint, the Company made false and misleading statements to the market. Lottery.com failed to maintain appropriate accounting controls.
“The Company also failed to maintain appropriate controls over financial reporting including revenue recognition and the reporting of cash. The Company was not in compliance with laws related to the sale of lottery tickets.
“Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Lottery.com, investors suffered damages.”
It comes after the firm expressed ‘substantial’ doubts over its future following serious solvency issues.
Lottery.com was unable to file its Q2 report in time to the SEC after terminating the employment of its President, Treasurer and Chief Financial Officer, Ryan Dickinson, effective July 1, 2022.
The termination was the result of an investigation that found the firm had overstated its available unrestricted cash balance by approximately $30m and, in the prior fiscal year, improperly recognised revenue in the same amount.
Both The Schall Law Firm and Johnston Fistel have given shareholders until October 18 to contact them with regards to the lawsuit.