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Investing.com -- Evolution AB (ST:EVOG) stock plunged about 11% on Wednesday after a Bloomberg report, citing court filings, revealed that current and former executives at the Stockholm-based online gambling company were secretly recorded discussing how its casino games reached illegal markets.
According to documents submitted to a New Jersey court, private intelligence firm Black Cube captured footage of Evolution executives describing how the company’s casino games made their way to countries under U.S. sanctions, including Iran and Sudan, as well as China, where gambling is illegal.
The recordings were taken between 2021 and 2024.
Black Cube filed the affidavit as part of a defamation lawsuit that Evolution had previously lodged against a law firm representing an unidentified client.
In its filing, Black Cube argued that the videos and transcripts demonstrate that Evolution knowingly supplied casino games to sanctioned countries and territories where gambling operations are prohibited.
Evolution has disputed the allegations, calling the affidavit "just another try from Black Cube to shift focus away from revealing the name of its client."
The company further stated that Black Cube’s research, portions of which were initially published in 2021, was "false and defamatory."
The significant stock decline reflects investor concerns about potential regulatory consequences and legal liabilities that could arise from these allegations if proven true.
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