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Online casinos faced with legal action

As one of the top online casinos faces a meltdown, shareholders in the online casinos firm are considering taking legal action against the online casinos company's advisers - Evolution Securities and Baker Tilly.
The online casinos company was brought to the London stock market two years ago, but institutional investors in the online casinos industry are unhappy that the history of the online casinos firm’s founder Gary Kaplan was not made clear in the online casinos company's offer document.
The online casinos firm’s representatives have insisted that Kaplan was not a director of the online casinos company, so it was under no obligation to detail his past, which includes a brush with the law over gambling offences in New York in 1993.
Kaplan, who is wanted by the US Department of Justice, faces possible charges of fraud and racketeering. He is said by those close to the company to have left Costa Rica for Israel.
One of the biggest institutional shareholders in the online casinos firm said: 'It [legal action] is possible given that certain information was not circulated at the time of the float. What's known now should have been known then. It's a disgraceful situation that's hard to explain away but individually it will be hard to get anywhere. Collectively, it's possible.'
The online casinos firm’s float was handled by Evolution Beeson Gregory, now Evolution Securities. Baker Tilly was its auditor and reporting accountant. Both firms have said they supplied all the information that was required of them to the relevant listing authorities.
David Carruthers, the former chief executive of the online casinos company, already accused of racketeering and fraud, has been incarcerated in a Missouri jail. His lawyers and family are believed to have raised $1m bail. Carruthers has pleaded not guilty to the charges and should be released from jail tomorrow.
Last Friday the online casinos firm announced it was closing down its US business, which generated most of its profits. Industry insiders say the closure of its US business will be a huge problem for the long-term viability of the company. Many predict the company will see its share price become worthless if it resumes trading. Its shares have been suspended for three weeks since the US authorities arrested Carruthers in Texas.
The online casinos firm hopes its decision to stop taking US bets will ward off any further legal action by US authorities.
American law makes it illegal for companies to take sport bets from US citizens via the telephone and internet.
The company’s withdrawal from the US will result in the loss of 800 jobs and will see it leave Costa Rica and Antigua. The company will now attempt to boost its presence in the potentially lucrative Asian market, having last year paid £17.2m for another top internet gambling company.
The controversy in the net gambling industry continues and one thing is certain – much more controversy will come in the future as firms continue to square off.

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