A securities class action has been filed against Faraday Future Intelligent Electric Inc. (FFIEW) on behalf of persons and entities that purchased or otherwise acquired Faraday Future securities between January 28, 2021 through November 15, 2021. This case has been filed in the USDC – C.D.CA.
Faraday Future claims it designs and engineers next-generation smart electric connected vehicles.
PSAC was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
On January 28, 2021, PSAC and FF Intelligent Mobility Global Holdings Ltd. (“Legacy FF”) announced that PSAC and Legacy FF entered into a definitive agreement for a business combination, and that the combined company would be renamed Faraday Future (the “Business Combination”).
On July 21, 2021, Faraday Future announced that it had completed the Business Combination and that its common stock and warrants would commence trading on the NASDAQ on July 22, 2021 under the ticker symbols “FFIE” and “FFIEW”, respectively.
On October 7, 2021, J Capital Research published a report alleging, among other things, that Faraday Future was unlikely to ever sell a car, noting that after eight years in business, the Company has “failed to deliver a car,” “has reneged on promises to build factories in five localities in the U.S. and China,” “is being sued by dozens of unpaid suppliers,” and “has failed to disclose that assets in China have been frozen by courts.” Moreover, the report alleged that Faraday Future’s claimed 14,000 deposits are fabricated because 78% of these reservations were made by a single undisclosed company that is likely an affiliate. The report further alleges that contrary to representations of progress toward manufacturing made by Faraday Future in September 2021, former engineering executives did not believe that the car was ready for production.
On this news, the Company’s share price fell $0.35 per share, or more than 4%, to close at $8.05 per share on October 8, 2021.
On November 15, 2021, Faraday Future announced that it would be unable to file its Form 10-Q for the fiscal quarter ended September 30, 2021 on time. Faraday Future further announced that its board of directors “formed a special committee of independent directors to review allegations of inaccurate disclosures,” including the claims in the J Capital report.
On this news, the Company’s share price fell $0.28 per share, or approximately 3%, to close at $8.83 per share on November 16, 2021.
Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company had assets in China frozen by courts, (2) that a significant percentage of its deposits for future deliveries were attributable to a single undisclosed affiliate; (3) that the Company’s cars were not as close to production as the Company claimed; (4) that, as a result of previously issued statements that were misleading and/or inaccurate, Faraday Future could not timely file its quarterly report; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other class members have suffered significant losses and damages.