Evolution has achieved a legal win in the United States following the dismissal of an investor class action lawsuit and the expiration of the appeal period.
On 5 September, a federal court dismissed with prejudice a securities fraud case filed by investors holding unsponsored American Depository Receipts (ADRs) linked to Evolution’s Stockholm-listed shares.
With the 30-day appeal period now elapsed, the lengthy case has come to a definitive end.
The lawsuit, filed in the US District Court for the Eastern District of Pennsylvania, accused Evolution CEO Martin Carlesund and former CFO Jacob Kaplan of misleading investors regarding the company’s growth prospects and its clients’ compliance with regulations between 2019 and 2023.
A previous ruling in April had already cleared Carlesund and Kaplan of any wrongdoing, leaving only the company itself as a defendant. The plaintiffs claimed that Evolution should still be held accountable under US securities law, arguing that its American subsidiaries effectively operated as its “alter egos.”
Judge Mia Roberts Perez, however, rejected this assertion after extensive jurisdictional review, concluding that Evolution AB maintains a “clear corporate separation” from its US-based entities — ultimately dismissing the case in full.
Mia Roberts Perez mentioned:
Each subsidiary is separately incorporated, operates its own facilities in its respective jurisdiction, employs its own workforce, and maintains its own management team, with no shared officers or employees with Evolution AB since at least 2019.
The subsidiaries handle their own operational, administrative, and commercial functions, including their own studios, marketing, legal, compliance, and finance departments. The subsidiaries contract directly with customers.
This structure, along with the absence of overlapping personnel, supports the conclusion that Evolution AB does not exercise the type of day-to-day control necessary to satisfy the alter-ego standard.
Judge Perez determined that Evolution and its subsidiaries maintain a typical parent–subsidiary relationship, with no evidence suggesting deeper control or integration. Consequently, the court dismissed the lawsuit for lack of personal jurisdiction, effectively bringing the case to a permanent close.
In her decision, Judge Perez emphasized that the investors failed to establish that the Swedish parent company was subject to the court’s jurisdiction or that it could be directly sued in Pennsylvania. Furthermore, the plaintiffs could not prove that their allegations were linked to any of Evolution’s three subsidiaries operating within the state.
The case centered on unsponsored American Depository Receipts (ADRs), which are certificates issued by US financial institutions enabling investors to trade foreign-listed shares without the direct participation of the issuing company. Since Evolution neither approved nor was involved in creating these ADRs, the court ruled that its limited US activities through subsidiaries were insufficient to confer jurisdiction.
