Gibbs Law Group Investigates Potential Securities Law Violations
A Mullen Automotive class action lawsuit has been filed on behalf of investors who lost money in Mullen (NASDAQ: MULN). Shares of Mullen Automotive dropped 10% on April 6, 2022, after Hindenburg Research published a scathing report alleging that the company misrepresented test results for its solid-state battery technology, exaggerated its business relationships, and overstated its ability to manufacture and sell its branded products. If you purchased or acquired Mullen Automotive shares between June 15, 2020, and April 6, 2022, please reach out to Gibbs Law Group before July 5, 2022, to discuss your legal rights and options.
To speak with an attorney regarding this class action lawsuit investigation, click here or call (888) 410-2925.
On Wednesday, April 6, 2022, Hindenburg Research released a report accusing development-stage electronic vehicle (EV) manufacturer, Mullen Automotive, of overstating its business deals, production timeline, and battery technology, among other things. According to Hindenburg Research, Mullen falsely claimed that two electric cargo vans it would be manufacturing were its own, when they are actually Chinese EVs called the Qiantu K50, rebranded with a Mullen logo. Previously, in December 2018, Mullen and Chinese auto manufacturer, Qiantu, announced that they signed an agreement to sell and assemble cars in North America and Mullen subsequently put its logo on Qiantu’s K50 vehicle and re-branded it as the “DragonFly.” Mullen's then-CTO Frank McMahon announced at an auto show that sales for the DragonFly would begin in 2020. But following the reveal, Mullen allegedly defaulted on its payment obligations to Qiantu, and Qiantu terminated their agreement in October 2019, yet Mullen continued marketing the vehicle as its own product, despite lacking the finances or technology to commercially produce these vehicles solo, per the Hindenburg report.
As reported by Hindenburg, in a February 2022 press release, Mullen made sweeping claims about its solid-state battery testing, claiming that its battery cell “yielded 343 Ah at 4.3 volts,” which the company claimed is almost double that of other top EV companies. In response, the CEO of the company that performed the test results explained that these results were actually recycled from a previous testing cycle and asserted: “[w]e never would have said that. We never did say it and certainly wouldn’t have said it based on the results of testing that battery,” as alleged in the Hindenburg report. Hindenburg further details how that same month, Mullen claimed its solid-state battery technology was on track for commercialization in 18 to 24 months, despite only spending around $3 million in R&D in 2021, which is supposedly significantly lower than other “major technology and automakers in the industry who have collectively invested billions on solving the problem."
The Hindenburg report further claims that Mullen has misrepresented the nature of its business relationships with several companies. For example, Hindenburg spoke with a senior executive who claimed that Mullen’s 2020 joint venture with NextMetals Ltd to manufacture its solid-state battery technology “didn’t exist at all,” and was a complete fabrication.
Following the news of the Hindenburg report, Mullen Automotive stock dropped 10%, on April 6, 2022, causing significant harm to investors.
What Should Mullen Automotive Investors Do?
If you invested in Mullen Automotive, visit our website or contact our securities team directly at (888) 410-2925 to discuss how you may be able to recover your losses. Our investigation concerns whether Mullen Automotive has violated federal securities laws.
About Gibbs Law Group
Gibbs Law Group represents individual and institutional investors throughout the country in securities litigation to correct abusive corporate governance practices, breaches of fiduciary duty, and proxy violations. The firm has recovered over a billion dollars for its clients against some of the world’s largest corporations, and our attorneys have received numerous honors for their work, including “Best Lawyers in America,” “Top Plaintiff Lawyers in California,” “California Lawyer Attorney of the Year,” “Top Class Action Attorneys Under 40,” “Consumer Protection MVP,” and “Top Cybersecurity/ Privacy Attorneys Under 40.”
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