The soap opera that is Lottery.com (NASDAQ:LTRY) continued this week as Chairman of the Board Richard Kivel left the company while noting Chief Compliance Officer Dennis Ruggeri is under FBI investigation.
In a letter to what remains of the gaming company’s board, Kivel highlights a variety of events that made it nearly impossible to perform his duties as an independent director and help right the ship at the sinking online lottery outfit. Those include the company’s inability to procure needed financing from an investor, recoup funds from another investor and allegations of double-dealing by some executives.
Lottery.com’s slide into the abyss commenced in earnest earlier this year when in a regulatory filing with the Securities and Exchange Commission (SEC), the company raised doubts about its ability to continue as a going concern. The operator came public in October 2021 following a merger with special purpose acquisition company (SPAC) Trident Acquisitions Corp. Its share are down 95.57% year-to-date.
Due to its precarious financial position, Lottery.com needs capital. Woodford Eurasia was supposed to provide emergency $61 million in various forms, but Kivel told the board there’s no sign that money will arrive.
Members of the Woodford Eurasia Assets organisation including Nasib Piriyev, a partner at PNN-Group, which controls Woodford and other entities, have made false and misleading promises to the company and statements to third parties which have created disruption within the business and loss of critical staff,” he wrote in his resignation letter.
Lottery.com announced today it appointed Matthew Howard McGahan as chairman of the board and that Barney Battles and Naila Chowdhury are filling two of the recently created vacant director spots.
Kivel said in his letter that McGahan has “taken complete control” of the board and forced him out.
FBI Investigation not Immediately Disclosed to Board
As noted above, Chief Compliance Officer Dennis Ruggeri is being investigated by the FBI — material information for the board and investors of any publicly traded company.
However, Kivel asserts interim CEO Sohail Quraeshi new about the FBI examination and didn’t tell him or the rest of the directors, extending Lottery’com’s reputation for dubious practices.
“I was made aware that the Chief Compliance Officer Dennis Ruggeri, appointed by Sohail Quraeshi is currently under investigation by the FBI. I spoke with Mr. Ruggeri and he confirmed that this is true and accurate information. This demonstrates a clear lack of good judgment by Sohail Quraeshi, who was in possession of these facts and did not disclose them to the Board prior to the appointment of this individual,” wrote Kivel in his letter.
Kivel’s missive and media accounts do not detail exactly why the FBI is looking into Ruggeri.
Double-Dealing at Lottery.com
Further compounding woes associated with Lottery.com’s faint recovery hopes are allegations brought by Kivel that investors and other parties are double-dealing.
For example, he claims some investors are aligning themselves with fired CFO Ryan Dickinson. Additionally, Kivel wrote that CEO Quraeshi is “negotiating behind the scenes with J. Streicher, without Board approval or the knowledge of our legal counsel.” Streicher is under court order to pay the company $16.5 million and the firm has spent $400,000 in legal fees trying to attain that money.
“The actions of Mr. McGahan and Mr. Quraeshi have put this company in serious jeopardy and have caused the loss of important partners and top employees. The inactions and broken promises of the investment groups led by Nasib Piriyev have further damaged the company and hindered its ability to perform and recover,” noted Kivel.
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