In its complaint, which was filed in the US District Court for the Southern District of New York on 10 December, the law firm accuses Paysafe of making “materially false and/or misleading statements,” as well as failing to “disclose material adverse facts about the company’s business, operations and prospects.”
Specifically, the complaint alleges that Paysafe failed to inform investors that it was negatively impacted by gambling regulations in key European markets, that it was encountering performance challenges in its Digital Wallet segment and that new ecommerce customer agreements were being pushed back.
As a result of this, Glancy, Prongay & Murray claim that Paysafe’s positive statements about its business, operations and prospects were “materially misleading and/or lacked a reasonable basis.”
Paysafe became a publicly listed company on 30 March 2021 through a business combination agreement with special-purpose acquisition firm FTAC. Then, on 11 November, before the market opened, the company revised its revenue guidance for the full year from $1.53-$1.55bn to $1.47-$1.48bn.
According to the law firm, Paysafe attributed this to “gambling regulations and softness in key European markets and performance challenges impacting the Digital Wallet segment” and “the modified scope and timing of new ecommerce customer agreements relative to the company’s original expectations for these agreements.”
On the same day, Paysafe’s share price fell by more than 40% to $4.24 by the close of trading. The law firm encouraged any investors who were adversely affected by this to submit their contact information on its website.
