StubHub and its CEO, Eric Baker, are facing a proposed $5-million class-action lawsuit in the United States due to their connections with large-scale scalpers, as revealed by CBC News recently. The lawsuit, filed by New York ticket buyer Louis Sanquini on Monday, accuses StubHub of deceptive practices and fraudulent misrepresentation for portraying itself as a “marketplace for fans to buy and sell tickets.”

Despite StubHub’s claims of being a mere technology platform without involvement in ticket transactions, recent filings with the U.S. Securities and Exchange Commission disclosed that Baker operates Andro Capital, a hedge fund that conducts significant resale of sports and concert tickets on the StubHub platform.

Sanquini initiated the proposed class action in the Southern District of New York, alleging that consumers were misled about StubHub’s operations and believed it to be a neutral marketplace. Lead counsel Kevin Steinberg emphasized the importance of honesty and transparency for consumers.

The lawsuit states that StubHub’s failure to disclose its conflict of interest while marketing itself as a fan-to-fan marketplace deceived customers, leading them to pay prices and accept terms they would not have agreed to if the truth were known. Sanquini expressed that had he been aware of the CEO’s financial interest and the company’s support for professional resellers, he would not have used StubHub to purchase tickets for events like a Kiss concert in 2023 or a Major League Soccer match in 2024.

In response to the allegations, a StubHub spokesperson declined to comment on the legal matter, noting that none of the claims have been tested in court. The cancellation of thousands of World Cup ticket orders by StubHub, despite its “FanProtect Guarantee,” has drawn increased scrutiny and led to complaints to regulatory authorities in the U.S. and Canada, as well as formal investigations by Consumer Protection B.C. and the Texas Attorney General’s office.