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NEW YORK - Allied Gaming & Entertainment Inc. (NASDAQ:AGAE) has filed a lawsuit against Knighted Pastures, LLC, its Managing Partner Roy Choi, and two other defendants for allegedly violating federal securities laws, according to a press release statement issued Thursday.
The lawsuit, filed in the United States District Court for the Central District of California, aims to prevent the defendants from what AGAE describes as misleading stockholders and acting as an undisclosed group in connection with Choi’s attempt to replace the company’s Board of Directors.
AGAE alleges that Knighted and Choi have engaged in a year-long scheme to accumulate large quantities of AGAE stock without proper disclosure. The company claims the defendants collectively acquired approximately 37.8% ownership of AGAE as of May 15, 2025, through what it describes as coordinated purchases that violated federal securities laws and evaded the company’s Stockholder Rights Plan. InvestingPro data shows the stock has demonstrated high price volatility, with the share price ranging from $0.70 to $3.79 over the past 52 weeks.
"We are taking this action to protect the rights and interests of all our stockholders," said Yangyang Li, AGAE President and Chairman. "We believe the Knighted Group has deliberately misled stockholders and, in doing so, has violated federal securities laws."
The lawsuit seeks declaratory and injunctive relief to prevent Knighted from continuing its alleged violations. AGAE also asserts that Knighted’s notice of stockholder nomination is deficient because it fails to disclose information about what the company calls a "secret stockholder group."
The complaint was filed as an exhibit to AGAE’s Form 8-K filed on June 12, 2025.
Allied Gaming & Entertainment is a global experiential entertainment company focused on providing experiences to gamers and concertgoers.
In other recent news, Allied Gaming & Entertainment, Inc. has disclosed a significant development regarding its compliance with Nasdaq’s listing requirements. The company received a deficiency notice from Nasdaq due to delays in filing its mandatory financial reports, specifically missing deadlines for its Quarterly Report for the quarter ending March 31, 2025, and its Annual Report for the fiscal year ending December 31, 2024. Allied Gaming has until June 16, 2025, to submit a plan to regain compliance, with a potential extension until October 13, 2025, if Nasdaq approves their plan. In another development, Allied Gaming is facing a board nomination challenge from Knighted Pastures, LLC, which intends to nominate candidates for the company’s Board of Directors. The company has expressed strong opposition to this move, arguing it could harm shareholder value and disrupt relationships with strategic partners. Despite attempts to resolve the situation by offering board seats to Knighted, Allied Gaming reports that Knighted declined and instead demanded full control. The company has retained legal and strategic advisors to manage the situation and plans to provide further recommendations to its stockholders. These events highlight ongoing challenges for Allied Gaming as it navigates regulatory and governance issues.
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