Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
Poker legalization violations overview:
- Who: PokerStars parent company Flutter Entertainment plc will pay $4 million to the Securities and Exchange Commission.
- Why: The Stars Group had allegedly violated the Foreign and Corrupt Practices Act while advocating for poker legalization in Russia.
- Where: The PokerStars parent company lawsuit was filed before the Securities and Exchange Commission.
PokerStars parent company Flutter Entertainment plc will reportedly pay $4 million to the U.S. Securities and Exchange Commission (SEC) for allegedly violating the Foreign Corrupt Practices Act while advocating for poker legalization in Russia.
In May 2020, Flutter reportedly acquired The Stars Group, which had allegedly paid close to $9 million to Russian consultants in an effort to legalize poker in Russia from May 2015 to May 2020. The Stars Group failed to maintain sufficient accounting controls and records, such as inaccurately recording certain payments as lobbying fees, according to the SEC’s order.
SEC: The Stars Group violated Exchange Act in Russia poker legalization efforts
According to the SEC’s findings, The Stars Group hired consultants to lobby Russian government officials to support poker legalization in the country. During this time, Russia was a “gray market” in which poker was neither expressly permitted nor prohibited, the SEC order explains.
The SEC claims The Stars Group failed to perform adequate due diligence such as background checks and written contracts for the Russian consultants it hired. Additionally, The Stars Group allegedly failed to monitor its consultant contracts and abide by their terms, such as enforcing the contractual obligation for consultants to submit monthly reports detailing their activities.
The SEC order says these reports “were neither submitted to nor requested by the Company.”
The Stars Group allegedly failed to review the consultants’ invoices to determine if they actually provided the services. Instead, the company approved and paid the consultants’ invoices as long as the amount was within the allocated budget for the Russian consultants’ activities, according to the SEC.
PokerStars parent says SEC investigation involved ‘legacy issue’ before it owned company
Flutter did not admit any wrongdoing, but agreed to pay the $4 million penalty to the SEC and cease and desist from certain Exchange Act violations.
A Flutter spokesperson noted that the SEC investigation involved “a legacy issue, related to a period prior to Flutter’s ownership of [The Stars Group].”
In 2020, The Stars Group Inc. settled a class action lawsuit in Canada over allegations it violated the Securities Act by making misleading statements or omissions of fact.
What do you think about the penalty the SEC imposed on the PokerStars parent? Join the discussion in the comments!
The PokerStars parent lawsuit is In the Matter of Flutter Entertainment plc, as successor-in-interest to The Stars Group Inc., Case No. 3-21330, before the U.S. Securities and Exchange Commission.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
- Activision hit with $35M fine for violating SEC whistleblower protection rules
- SEC lawsuit claims Gemini crypto exchange sold unregistered securities
- SEC lawsuit alleges man defrauded Orthodox Jewish community members
- Morgan Stanley to pay SEC $35M to settle data exposure inquiry
