Sportradar Faces Numerous Securities Fraud Investigations Amid Short-Seller Scandal
Eleven US law firms have opened securities fraud investigations into Sportradar. What does that actually mean, and what happens next?
This article is for informational purposes only and does not constitute legal or investment advice. Sportradar denies the allegations contained in the short-seller reports. No formal complaint has been filed as of the date of publication. The Sports and Crime Briefing is explaining herein how this story is progressing.
Within 48 hours of the Muddy Waters and Callisto Research short-seller reports that wiped over 22% off Sportradar’s share price, at least eleven American law firms announced securities fraud investigations into the company.
Sportradar CEO Carsten Koerl responded with an open letter on LinkedIn calling the reports “entirely false, poorly researched, deliberately taken out of context.”
Amid this noise, it is important to remember that no formal complaint has yet been filed against Sportradar. No government regulator has publicly opened an investigation.
But some legal machinery is now in motion, and understanding what it is, how it works, and what it is likely to produce is important for anyone following this story.
For readers who have not yet seen it, our article, The Sportradar Scandal, in 10 Key Takeaways sets out the full substance of the short-seller allegations.
1. What is a “securities fraud investigation,” and why did eleven of them appear overnight?
The phrase sounds official. It is not.
None of the eleven announcements come from the Securities and Exchange Commission, from the Department of Justice, from any state gambling regulator, or from any arm of any government anywhere.
They come from private plaintiffs’ law firms, securities class action specialists, that monitor the NASDAQ and NYSE for large single-day stock drops. When a stock falls sharply enough to suggest significant shareholder losses, these firms issue press releases announcing “investigations” and soliciting affected investors.
