December 13, 2021 Legal, Technology, Marketing

NYC law firm files class action lawsuit against Paysafe

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Company accused of alleged ‘misleading statements’ affecting stock price.

Stockholder rights law firm Bragar Eagel & Squire, PC, on Monday said it has filed a class action lawsuit against Paysafe Limited.

The firm, which is headquartered in New York City, said the action was filed in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired Paysafe securities between December 7, 2020, and November 10, 2021, both dates inclusive, which is known as the “Class Period.”

Investors have until February 8, 2022, to apply to the Court to be appointed as lead plaintiff in the lawsuit, the law firm said.

According to a statement issued Monday by Bragar Eagel & Squire, on March 30, 2021, Paysafe became a public entity via business combination with FTAC.

Then, on November 11, before the market opened, the firm said Paysafe announced that it was revising its revenue guidance for the full year 2021 downward from a range of $1,530m to $1,550m to a range of $1,470m to $1,480m.

Again, according to the law firm, Paysafe attributed the revision to “[g]ambling regulations and softness in key European markets and performance challenges impacting the Digital Wallet segment” and “[t]he modified scope and timing of new eCommerce customer agreements relative to the Company’s original expectations for these agreements.”

On this news, the firm said the company’s share price fell $3.03 per share, or more than 40%, to close at $4.24 per share on November 11, 2021, on “unusually heavy trading volume.”

As of 12:30 pm Eastern Standard Time on December 13, Paysafe’s stock price was $3.72 per share, down $0.25 (6.29%) since market open.

“The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects,” Bragar Eagel & Squire said in a statement. “Specifically, Defendants failed to disclose to investors that: (1) that Paysafe was being negatively impacted by gambling regulations in key European markets; (2) that Paysafe was encountering performance challenges in its Digital Wallet segment; (3) that new eCommerce customer agreements were being pushed back; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.”

Paysafe did not immediately respond to a request for comment from Gaming America.

Bragar Eagel & Squire has offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative and other complex litigation in state and federal courts across the country.

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