The Securities and Exchange Commission (SEC) has filed charges against former Lottery.com executives, including its one-time CEO, over allegations of financial fraud.
The charges allege the named parties conducted a fraudulent scheme and made false statements in connection with special purpose acquisition company (SPAC) merger.
Among those charged are former Lottery.com CEO Lawrence Anthony DiMatteo, co-founder and former chief revenue officer Matthew Clemenson and ex-CFO Ryan Dickinson.
Vadim Komissarov, CEO of SPAC Trident Acquisitions Corp, was also named in the SEC complaint filed in the federal district court in Manhattan.
The offences are alleged to have taken place between 2020 and 2022, during which time Lottery.com merged with Trident Acquisitions.
According to the SEC, Komissarov planned and executed, alongside DiMatteo, Clemenson and Dickinson, a scam whereby Lottery.com received $9m for “valueless customer data”.
The money was then used to “overpay” for two Mexican companies, allegedly returning the sum to its original source.
The SEC also alleges that in the weeks before the SPAC merger, DiMatteo, Clemenson and Dickinson engaged in a revenue scam involving a “bogus $30m sale of advertising credits – and, following the merger, executed two additional bogus sales totalling over $35m”.
This revenue accounted for a significant amount of Lottery.com’s reported revenue, which the SEC claimed misled investors who relied on the company’s inflated financials, with those investors suffering substantial financial losses.
In addition to charging the individuals with violations of the Securities Act 1933 and Securities Exchange Act 1934, the SEC has also charged Lottery.com for breaches of the latter legislation.
An SEC statement read: “The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against all defendants, as well as officer-and-director bars against Komissarov, DiMatteo, Clemenson and Dickinson.
“Without denying the SEC’s allegations, Clemenson and Dickinson consented to the entry of judgments, subject to court approval, in which each agreed to be permanently enjoined from violating the charged provisions of federal securities law and from acting as an officer or director of any public company, and agreed to pay disgorgement, prejudgment interest and/or a civil penalty in an amount to be determined by the court, upon motion by the SEC.”
DiMatteo and Clemenson co-founded the company in 2015, before leaving their respective positions in July 2022.
In response, Lottery.com have distanced themselves from the individuals named in the complaint.
A Lottery.com statement noted: “The complaint relates to alleged conduct occurring primarily between 2020 and mid-2022, including periods prior to and shortly following the company’s merger with Trident Acquisition Corp.
“The individuals identified in the complaint, who previously served as executive officers, are no longer employed by the company and have no ongoing association or involvement with the company in any capacity.
“Since mid-2022, the company has undergone substantial changes in management, governance and internal controls. The company’s current management team was not involved in the conduct alleged in the complaint.
“The company has fully cooperated with the SEC’s investigation and intends to continue full cooperation with the SEC in connection with this matter.”
The operator went on to say that although the SEC complaint “lacks merit”, it is in settlement discussions with the regulator.
The statement added: “While the company maintains the complaint lacks merit against the company and will defend against the lawsuit if necessary, the company has entered into non-binding discussions with the SEC regarding a potential settlement.
“There can be no assurance that a final agreement will be reached, but the matter appears to be very close to being resolved without any material liability to the company.”
Lottery.com had previously been named in a shareholder class action lawsuit in 2022, which related to irregularities and potential non-compliance with state and federal laws relating to accounting practices.
The post SEC files charges against former Lottery.com execs over alleged SPAC fraud first appeared on EGR Intel.
Ex-CEO Lawrence Anthony DiMatteo among those accused of “conducting a fraudulent scheme and making false statements” pertaining to a merger with a special purpose acquisition company
The post SEC files charges against former Lottery.com execs over alleged SPAC fraud first appeared on EGR Intel.