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SEC hands $4m civil penalty to Flutter over Stars Group Russian payments


The US Securities and Exchange Commission (SEC) has ordered Flutter Entertainment to pay a $4.0m civil penalty over The Stars Group’s use of third-party consultants in Russia.

Flutter acquired The Stars Group, operator of a number of brands such as PokerStars and Full Tilt, in May of 2020, with the SEC order referring to a period between May 26, 2015 and May 15, 2020.

During this period, the order said while The Stars Group’s shares were registered with the SEC, it paid approximately $8.9m to consultants in Russia in support of its operations and efforts to have poker legalized in the country.

The SEC also found during this period, The Stars Group failed to both devise and maintain a “sufficient” system of internal accounting controls over its operations in Russia with respect to third-party consultants, while it failed to consistently make and keep accurate books and records regarding its consultant payments in Russia.

According to the order, contemporaneous emails recovered by the SEC indicated that those payments related to a series of matters including the reimbursement for New Year’s gifts to individuals such as Russian government officials, which was prohibited under company policies at the time.

Certain payments were also made for the reimbursement of a consultant’s payments to Roskomnadzor, the Russian state agency responsible for administering internet censorship filters.

As the successor-in-interest to The Stars Group, the SEC charged Flutter with violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, both of which relate to books and records and internal accounting control.

Without admitting or denying the findings, Flutter agreed to cease and desist from future violations, as well as pay a penalty of $4.0m. The SEC also noted Flutter’s cooperation and remedial efforts, as well as subsequent withdrawal from the Russian market following Russia’s invasion of Ukraine in February 2022.

The SEC was assisted on the case by the Québec Autorité des Marchés Financiers, Latvia Financial and Capital Market Commission, Belize International Financial Services Commission, United Kingdom Financial Conduct Authority, British Virgin Islands Financial Services Commission, Central Bank of Armenia, Czech National Bank, National Bank of Georgia, and the Cyprus Securities and Exchange Commission.