{"id":188897,"date":"2021-10-13T03:47:53","date_gmt":"2021-10-13T10:47:53","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=188897"},"modified":"2021-10-13T13:56:28","modified_gmt":"2021-10-13T20:56:28","slug":"draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/","title":{"rendered":"DraftKings Hit by Lawsuit Alleging \u2018Unjust Enrichment\u2019 in SBTech Deal"},"content":{"rendered":"

A lawsuit filed Friday in a New York federal court accuses several DraftKings directors of breach of fiduciary duty and unjust enrichment.<\/p>\n

\"DraftKings
Left-right: DraftKings founders Matt Kalish, Jason Robins, and Paul Liberman are the subject of a shareholder derivative complaint, alleging unjust enrichment. (Image: Inc. Magazine<\/em>)<\/figcaption><\/figure>\n

The 103-page complaint brought by shareholder Jiahan Yu alleges the defendants caused the company to engage in \u201cillicit operations,\u201d thereby exposing it to \u201cheightened risk of criminal or regulatory enforcement actions.\u201d<\/p>\n

This is in relation to DraftKing\u2019s controversial three-way reverse merger with Bulgaria-based software provider SBTech and special purpose acquisition company (SPAC) Diamond Eagle Acquisition Corp (DEAC).<\/strong><\/p>\n

Among those named are the Draftkings founders, CEO Jason Robins, CRO Matt Kalish, and COO Paul Liberman. Another defendant is Shalom McKenzie<\/a>, the founder and majority shareholder of\u00a0 SBTech. He is now the biggest shareholder in the combined company, with around 11 percent.<\/p>\n

Black Market Ops<\/strong><\/h2>\n

Yu alleges SBTech has \u201ca long and ongoing record of operating in black markets,\u201d particularly in Asia, which it attempted to conceal prior to the merger by creating a \u201cfront\u201d company, BTi CoreTech.<\/p>\n

BTi continued the black-market operations, while \u201costensibly shielding SBTech and DraftKings from scrutiny,\u201d the lawsuit alleges.<\/p>\n

\n

The complaint echoes allegations contained in a report published in June by short-selling activist Hindenburg Research. The report estimated that roughly 50 percent of SBTech\u2019s revenues come from jurisdictions where gambling is illegal.<\/p>\n<\/div>\n

It also repeats Hindenburg\u2019s claim<\/a> that one of the tech firm\u2019s clients was 12Bet, whose ownership has been linked to high-stakes poker player Paul Phua. The FBI claims Phua is a \u201chigh-ranking member of the 14K triads.\u201d<\/p>\n

As a short-seller, Hindenburg had a financial incentive to drive down DraftKings’ shares.<\/p>\n

DraftKings Faces Multiple Lawsuits<\/strong><\/h2>\n

Yu further asserts that the defendants, who were then in control of DraftKings, \u201cwillfully or recklessly made and\/or caused the Company to make false and misleading statements\u201d concerning SBtech\u2019s operations, so they could benefit financially from the merger.<\/p>\n

The Individual Defendant\u2019s misrepresentations had the effect of misleading the investing public and artificially inflating the Company\u2019s stock during the Relevant Period, during which time at least seven Individual Defendants benefited from lucrative insider sales at artificially inflated prices for proceeds of approximately $825.3 million,\u201d the lawsuit states.<\/p><\/blockquote>\n

DraftKings is already the subject of two pending class-action lawsuits which make similar claims. It was also subpoenaed by the US Securities Exchange Commission (SEC) in the wake of the Hindenburg allegations. The company has said it is cooperating with that investigation.<\/p>\n

Yu\u2019s lawsuit is a shareholder derivative action, which allows a minority shareholder to sue majority shareholders on behalf of the company. It seeks financial restitution for DraftKings from individual defendants and costs for the plaintiff.<\/p>\n","protected":false},"excerpt":{"rendered":"

A lawsuit filed Friday in a New York federal court accuses several DraftKings directors of breach of fiduciary duty and unjust enrichment. The 103-page complaint brought by shareholder Jiahan Yu alleges the defendants caused the company to engage in \u201cillicit operations,\u201d thereby exposing it to \u201cheightened risk of criminal or regulatory enforcement actions.\u201d This is […]<\/p>\n","protected":false},"author":36,"featured_media":188898,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[60,32093],"tags":[],"acf":[],"yoast_head":"\nDraftKings Hit by Lawsuit Alleging \u2018Unjust Enrichment\u2019 in SBTech Deal<\/title>\n<meta name=\"description\" content=\"DraftKings founder Jason Robins and Matt Kalish among those named in lawsuit that alleges unjust enrichment from SBTech merger.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings Hit by Lawsuit Alleging \u2018Unjust Enrichment\u2019 in SBTech Deal\" \/>\n<meta property=\"og:description\" content=\"DraftKings founder Jason Robins and Matt Kalish among those named in lawsuit that alleges unjust enrichment from SBTech merger.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-10-13T10:47:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-10-13T20:56:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/10\/DK.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Philip Conneller\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@casinoorgphilc\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Philip Conneller\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/\",\"name\":\"DraftKings Hit by Lawsuit Alleging \u2018Unjust Enrichment\u2019 in SBTech Deal\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/10\/DK.jpg\",\"datePublished\":\"2021-10-13T10:47:53+00:00\",\"dateModified\":\"2021-10-13T20:56:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/58769b72851c8cf117fb58ca150ebf8b\"},\"description\":\"DraftKings founder Jason Robins and Matt Kalish among those named in lawsuit that alleges unjust enrichment from SBTech merger.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-hit-by-lawsuit-alleging-unjust-enrichment-in-sbtech-deal\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/10\/DK.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/10\/DK.jpg\",\"width\":1920,\"height\":1080,\"caption\":\"Left-right: DraftKings founders Matt Kalish, Jason Robins, and Paul Liberman are the subject of a shareholder derivative complaint, alleging unjust enrichment. 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