Law firm makes its case
Global online payments provider Paysafe Limited is facing allegations of securities fraud. A Los Angeles-based law firm Glancy, Prongay & Murray has filed a class-action lawsuit against the payment provider on behalf of its investors.
materially false and/or misleading statements”
The law firm filed the lawsuit on December 10 in the US District Court for the Southern District of New York. According to the complaint, Paysafe made “materially false and/or misleading statements” and did not disclose material adverse facts regarding its prospects, operations, and overall business.
Paysafe is a key player in the online gambling space all across the world, owning popular online payment solutions like Neteller, Skrill, and Paysafecard.
Lower revenue forecast
According to one allegation outlined in the complaint, Paysafe did not inform investors that changing gambling regulations in key European markets had negatively impacted its business. It also failed to tell investors about pushbacks regarding new eCommerce customer agreements, as well as performance issues with its digital wallet segment.
The law firm has taken aim at Paysafe as a result, arguing that its positive statements regarding its prospects were materially misleading and/or without a reasonable basis.
Paysafe dropped its revenue forecasts for the financial year
Paysafe only went public in March after merging with a special purpose acquisition company. Last month, the supplier dropped its revenue forecasts for the financial year to $1.47bn-$1.48bn, down from $1.53bn-$1.55bn. The company blamed the drop on gambling regulations in key European markets, as well as digital wallet segment challenges, and issues relating to new eCommerce customer agreements.
Share price trouble
On the back of its downgraded forecast, Paysafe’s share price initially dropped by more than 40%. It has continued to drop since then, down almost 74% for the year to date.
The law firm behind the lawsuit is calling on parties negatively affected by this issue to join the complaint. This covers anyone who bought or acquired Paysafe shares from December 7, 2020 up to November 10, 2021. Investors can apply to join as a lead plaintiff in the suit up until February 8, 2022.