MULN.US
id: 1320
Mullen Automotive (MULN) $7.25M Investor Settlement
C.D. California
Court2:22-cv-03026
Case number15 Jun 2020
Class period Start18 Apr 2022
Class period End26 Feb 2025
Claim deadlineMullen Automotive has agreed to a $7.25 million settlement to resolve a class action lawsuit brought by investors. The lawsuit alleged that the company misled investors about its electric vehicle (EV) production capabilities and partnerships. According to the claims, Mullen overstated its production timeline, technology development, and partnerships, leading to an artificial boost in its stock price.
Overview
The lawsuit claims Mullen made false statements about its EV production abilities and partnerships. These alleged misrepresentations caused the company's stock to be artificially inflated, resulting in significant financial losses for investors.
Timeline
- June 15, 2020: Mullen announced a merger with Net Element, Inc., claiming it could soon launch the Dragonfly K50 luxury sports car and other EV models.
- 2020-2021: Mullen continued to make optimistic statements about its production capabilities and partnerships, including plans to release the Dragonfly K50 and an electric SUV, the MX-05.
- April 6, 2022: Hindenburg Research published a report alleging that Mullen's production claims were unfounded and that the company lacked the capacity to meet its stated goals. This led to a 10% drop in the company's stock price.
Background
Mullen Automotive positioned itself as a promising new entrant in the EV market, with plans to introduce several electric vehicle models. However, a report from Hindenburg Research cast doubt on the company's actual capabilities and raised concerns about misleading statements made to investors. The report revealed that Mullen’s claims of revolutionary battery technology and imminent vehicle production were greatly exaggerated. It also indicated that the company misrepresented its agreements with partners like Qiantu Motors and used stock photos to falsely portray its manufacturing abilities.
What Investors Should Know
Mullen Automotive has agreed to settle for $7.25 million to resolve all allegations of misleading statements and exaggerated claims regarding its EV production capabilities.
Investors who suffered losses during the class period can file for a payout from the settlement fund.
Case Status
Stipulative Settlement
Alleged Offence
Misleading Statements,
Failure to Disclose
Suspected Party
Management,
Shareholder
Security Type
Stocks
Trade Direction
Long
Payout per Share
0.03
Filing date
05 March 2022
Plaintiffs
Mejgan Mirbaz
Attorneys
Glancy Prongay & Murray LLP (Los Angeles, CA)
Defendants
David Michery
Judge
Hon. Dolly M. Gee
Settlement agreement date
2024-08-14
Court hearing date
04 April 2025
Exclusion deadline
06 February 2025
Objection deadline
06 February 2025
Hearing deadline
04 April 2025
Attorney fee
$2,552,925
Trades matching type
FIFO
+$7,250,000
Cash Settlement Amount