Ammo Inc. Accused by Major Investor of GunBroker.com Deal Fraud

Ammo Inc.'s largest investor sued it for fraud, claiming he was duped into selling GunBroker.com for $240 million in a deal that gave him a 17% stake in the combined munitions distributor.

The lawsuit, made public Thursday, was filed by Steven Urvan, who founded GunBroker.com after eBay began restricting gun sales. GunBroker.com is allegedly the largest online marketplace for firearms and shooting accessories, with 6 million registered users and $60 million in yearly revenue when the merger closed.

In addition to the company, the fraud suit in Delaware’s Chancery Court targets 10 of Ammo’s current and former senior leaders, including ...