The parent company of PokerStarsFlutter Entertainment, will allegedly pay $4 million to the United States Securities and Exchange Commission for allegedly violating the Foreign Corrupt Practices Act while advocating for the legalization of poker in Russia.
PokerStars made operational mismanagement in Russian lands and now they will have to pay for it.
In May 2020, Flutter reportedly acquired The Stars Group, which had allegedly paid about $9 million to Russian consultants in an effort to legalize poker in vodka country from May 2015 to May 2020.
The SEC ordered that The Stars Group did not maintain sufficient accounting controls and records, such as incorrectly recording certain payments as tax fees. According to the SEC’s findings, The Stars Group hired Russian government consultants to support the legalization of poker in the country. During this time, Russia was a “gray market” in which poker was not expressly permitted or prohibited, the SEC order explains.
The SEC claims that The Stars Group failed to perform due diligence, such as background checks and written contracts, for the Russian consultants it hired. In addition, it allegedly failed to supervise the consultants or abide by their terms, such as enforcing a contractual obligation for them to submit monthly reports detailing their activities.
The Stars Group it allegedly failed to review the consultants’ invoices to determine whether they had actually provided the services. Instead, the company approved and paid the consultants’ invoices as long as the amount was within the budget allocated for the Russian consultants’ activities, according to the SEC. Flutter admitted no fault, but agreed to pay the $4 million SEC fine and to cease and desist certain Exchange Act violations.
A Flutter spokesperson noted that the SEC investigation involved “a legacy issue, relating to a period prior to Flutter’s ownership of [The Stars Group]».
Fuente: topclassactions.com.
