StubHub, CEO hit with 'deceptive practices' class action over mass scalping

StubHub, CEO hit with 'deceptive practices' class action over mass scalping

Buyer of soccer, Kiss concert tickets claims he was misled by StubHub

StubHub and its CEO, Eric Baker, have been hit with a proposed $5-million class-action lawsuit in the United States over the company's ties to large-scale scalpers — connections reported by CBC News last week.

The suit, filed Monday by New York ticket buyer Louis Sanquini, alleges deceptive practices and fraudulent misrepresentation over StubHub's promoting itself as a "marketplace for fans to buy and sell tickets."

The online ticket resale giant has faced a storm of customer complaints after cancelling thousands of World Cup tickets. The company has repeatedly said it is simply a technology platform that does not buy, sell or possess tickets.

However, CBC reported last week that Baker disclosed in recent filings with the U.S. Securities and Exchange Commission that he runs Andro Capital, a hedge fund that engages in large-scale resale of millions of dollars' worth of sports and concert tickets on the StubHub resale platform.

StubHub's 'marketplace for fans' is run by a mass scalper, SEC filings reveal

Sanquini filed the proposed class action in the Southern District of New York, arguing consumers were kept in the dark and that he believed StubHub was a "neutral" marketplace.

Lead counsel Kevin Steinberg told CBC News in an emailed statement that "consumers deserve honesty and transparency."

StubHub CEO participates in mass scalping, SEC filings reveal

"While what StubHub is alleged to have engaged in and perpetrated upon millions of patrons is unfathomable, this case is about transparency and consumer trust. If companies make representations to the public, consumers are entitled to expect that those representations are complete and accurate," he said.

The claim reads: "Defendants' failure to disclose this conflict of interest, while affirmatively marketing StubHub as a fan-to-fan marketplace, deceived Plaintiff and the Class and caused them to pay prices, and accept terms, they would not have accepted had the truth been known."

Sanquini argues that had he known StubHub's CEO held a financial interest and that the company was helping finance professional resellers, he would never have used the resale site to buy tickets to see rock band Kiss in 2023 or to attend a New York Red Bulls-New York City FC Major League Soccer match in 2024.

A StubHub spokesperson wrote to CBC in an email late Monday: "Thank you for reaching out but we aren't going to comment on a legal matter."

None of the allegations has been tested in court.

World Cup cancellations draw scrutiny

StubHub has faced increased scrutiny and calls for an outside investigation after cancelling thousands of World Cup ticket orders despite its "FanProtect Guarantee."

Many disappointed customers say that although they were promised refunds or replacement tickets, they were shut out of World Cup matches at the last moment and left out of pocket for travel and hotel expenses, missing what some described as a "once-in-a-lifetime" opportunity.

The situation has prompted numerous complaints to the U.S. Federal Trade Commission and Canada's Competition Bureau, and has sparked formal investigations by Consumer Protection B.C. and the Texas Attorney General's office.

Dave Seglins is an investigative journalist whose recent work includes exposés on global ticket scalping, offshore tax avoidance and government surveillance. He covers a range of domestic and international issues, including rail safety, policing, government and corporate corruption.