S&C Obtains Dismissal of Securities Suit Against DraftKingsJanuary 23, 2023
DraftKings obtained the dismissal of putative securities class action arising from its acquisition of gaming-technology company SBTech. The litigation was filed after a short-seller published a report in June 2021 claiming that DraftKings' acquisition of SBTech exposed the company to illegal black market gambling in certain jurisdictions. On January 10, U.S. District Judge Paul A. Engelmayer of the Southern District of New York dismissed all claims with prejudice.
The court held that the complaint, which relied almost exclusively on the short-seller's report, failed to sufficiently allege any violations by SBTech of U.S. or foreign law or any material misstatements or omissions by DraftKings.
The court also agreed with S&C's arguments that plaintiff failed to sufficiently allege that any defendant acted with the scienter required to state a claim under the federal securities laws.
The S&C team consisted of Brian Frawley, Tim Weinstein and Charles Sullivan.