Mullen Automotive (NASDAQ:MULN) stock is in full focus after the electric vehicle (EV) company provided an update on its lawsuit against broker dealers TD Ameritrade, Charles Schwab (NYSE:SCHW), National Finance Services and others. Mullen has alleged that these parties engaged in a market manipulation scheme that resulted in an increase in the supply of MULN stock available to short. MULN stock has plummeted by about 60% since it announced the lawsuit on Aug. 29.
On Oct. 19, Judge Analisa Torres provided two deadlines for the parties involved in the case. Mullen, or the plaintiff, will have until Nov. 30 to file its amended complaint. Afterwards, both parties will have until Dec. 15 to jointly file their case management plan.
On the defendant side, the case management plan will include a motion to dismiss by a specific date. In the case of a favorable ruling for Mullen, the discovery process will begin soon after.
MULN Stock: Mullen Provides Update on Broker-Dealer Lawsuit
Mullen had previously retained law firms Christian Attar and Warshaw Burstein to assist with the case.
“We are optimistic that we will expose the wrongful conduct of the Defendants and obtain an award holding them responsible for every dollar they have wrongfully extracted from Mullen and its shareholders either from Settlement or Judgment,” said Christian Attar Managing Partner Wes Christian. “We intend to move this case forward as rapidly as possible.”
The original complaint alleged that the broker dealers sold fictitious shares of MULN stock before Mullen was able to issue shares and that they removed shares from customers’ accounts in order to lend them to other investors or to cover their own short positions prior to the issuance of new shares. These actions occurred between May 4 and Aug. 25 and involved over 34 million fictitious and/or shareholder-owned MULN shares. Based on these claims, the EV company was “forced to complete two reverse splits of its shares.”
Last week, Mullen proposed another reverse split in a ratio between 1-for-2 and 1-for-100 at its upcoming special meeting of stockholders. Mullen will only plan on enacting the reverse split if its shares cannot reach $1 organically.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
