Mullen Automotive (NASDAQ:MULN) stock is trading lower after the company announced that it had filed a market manipulation lawsuit against UBS Securities, IMC Financial Markets, Clear Street Markets and John Doe defendants one through 10. The electric vehicle (EV) company has hired law firms Warshaw Burstein and Christian Attar to assist with the case.
Mullen alleges that between Nov. 9, 2021 and Nov. 9, 2023, the defendants engaged in the “spoofing” of MULN stock. Spoofing occurs when an entity places a buy or sell order that it doesn’t intend on enacting in order to manipulate a stock’s price. This can influence other parties to place buy or sell orders that they otherwise wouldn’t have.
“In the 21 years our team has been prosecuting market manipulation cases against Wall Street, I believe this could be one of the largest and strongest spoofing and market manipulation cases we have handled. After working with our consulting and investigative experts, I believe the damage model could be in the billions of dollars,” said Christian Attar’s Wes Christian.
MULN Stock: Mullen Files Spoofing Lawsuit
In coordination with forensic investigators, the two law firms have concluded that spoofing has resulted in the issuance of 5 billion shares of MULN stock at artificially deflated prices. Mullen believes that the defendants have placed thousands of sell spoofing orders in order to drive down the price of MULN.
According to the complaint, UBS’ baiting order shares totaled 431.03 million, IMC’s shares totaled 255,095 and Clear Street’s shares totaled 39.64 million. UBS’ alleged baiting orders resulted in an average price decline of 1.76%, while IMC’s orders resulted in an average decline of 1.53% and Clear Street’s orders resulted in an average decline of 0.91%.
There could be additional shares as well. Mullen stated that “Only after discovery is taken can a full and complete record of Defendants proprietary trading and/or their customers trading be determined.”
Mullen ultimately seeks judgement that the defendants violated federal securities laws and should pay damages. It also requests that the defendants be enjoined from participating in further alleged market manipulation. The company has also requested a jury trial for the case.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
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.
