A lawsuit has been filed against Evolution, alleging that the company deceived investors about its growth trajectory and compliance. The suit, filed by Federman & Sherwood in the United States District Court for the Eastern District of Pennsylvania, represents entities that purchased Evolution shares between February 14, 2019, and October 25, 2023.
The lawsuit claims that Evolution made untrue or misleading statements about its growth potential, customer compliance, the company’s compliance, and the effect of non-compliance on revenue during this time period. Evolution’s CEO, Martin Carlesund, and CFO, Jacob Kaplan, are named as defendants in the lawsuit.
The complaint lists several incidents that took place between January 24, 2022, and October 26, 2023, which had a subsequent effect on Evolution’s share prices. The filing states that these incidents are proof of Evolution’s non-compliance.
The lawsuit alleges violations of Section 10(b) of the Securities Exchange Act and Rules 10b-5, as well as violations of Section 20(a) of the Securities Exchange Act. These sections prohibit attempts to defraud investors through untrue statements or omitting facts.
The suit aims to recover damages from all investors that purchased securities within the class action period. The lawsuit outlines several events that had an impact on Evolution’s share prices, including a report released by Analyst Generation Limited in January 2022, Australia’s gambling regulator calling for internet service providers to block online gambling sites, and penalties upheld against brands operated by ComeOn, a subsidiary of Cherry AB, an Evolution customer.
Additionally, Evolution’s Q1 and Q3 results revealed stagnation in its RNG business segment and delays in opening new studios, which also contributed to a decline in its share prices. Evolution has not yet published a response to the allegations.