(CN) – Investors claim in a federal class action that Live Nation Entertainment Inc. failed to abide by the terms of a deal with the U.S. Department of Justice to prevent the ticket giant’s monopolization of the live music promotion and ticketing market.
The April 18 lawsuit was filed in the U.S District Court for the Central District of California on behalf of anyone who purchased Live Nation stock between Feb. 23, 2017, and March 30, 2018.
The Beverly Hills, California-based company owns and operates more than 195 venues throughout the world.
According to the claim, Live Nation’s purchase of Ticketmaster Entertainment in 2010 “significantly expanded its ticketing services,” leading the company to enter into an antitrust consent decree with the Department of Justice that contained “specific rules” meant to impede the company from taking over the market.
After markets closed on April 1, 2018, The New York Times published an article alleging that Live Nation failed to abide by the terms of the decree by selling tickets at record highs, failing to reduce services fees, and using its control over concert tours to pressure venues into contracting with Ticketmaster. The article also alleged that Live Nation tickets 80 of the 100 top arenas in the country and that “no other company has more than a handful” and “no competition has risen to challenge it’s pre-eminence.”
The news caused Live Nation shares to fall by almost 10 percent on April 2. It continued to decline more than 4 percent to close at $36.61 per share on April 3.
Throughout the class period, Live Nation allegedly failed to disclose violations of the decree and that the company lacked adequate internal controls to prevent them.
“Defendants’ materially false and/or misleading statements during the class period resulted in plaintiff purchasing the company’s securities at artificially inflated prices,” the lawsuit says.
The class is represented by Lionel Glancy, Robert V. Prongay, Lesley F. Portnoy and Charles H. Linehan of Glancy Prongay & Murray LLP in Los Angeles, Ca.