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LAS VEGAS (Legal Newsline) – A public pension is suing PlayAGS, a designer of electronic gaming machines that primarily distributes them to Native American tribes.
Oklahoma Police Pension and Retirement System filed its case in Las Vegas federal court on Aug. 4 through lawyers at Wolf Rifkin in Vegas and Labaton Sucharow in New York.
PlayAGS reported a net loss of $7.6 million for the second quarter of 2019 a year ago, blaming challenges in Oklahoma. The stock dropped from $25.50 per share in March 2019 to as low as $3.58 per share now.
Prior to the stock drop, investors were misled about the financial state of the company, the lawsuit says. Officials touted Oklahoma as a “strong jurisdiction” that would help generate recurring revenues in 2019.
Defendants “failed to disclose to investors that: (i) PlayAGS’ growth strategies were failing; (ii) the Company was experiencing major execution issues in Oklahoma; (iii) therefore, the Company’s purported competitive strengths were not reasonably likely to lead to increased revenue; (iv) the Company’s internal controls over financial reporting were not effective; and (v) 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,” the lawsuit says.