The United States District Court for the Northern District of California dismissed a putative class action asserting claims under the Securities Exchange Act of 1934 and Rule 10b-5(b) against an electric vehicle company and its CEO, reports Shearman and Sterling.
Plaintiffs who purchased shares in Churchill Capital IV, which later merged with Lucid Motors, alleged that, prior to the merger, the company had made misrepresentations and omissions about its value. The companies closed the deal in July 2021 with Lucid trading on the Nasdaq.
The court held that plaintiffs had standing to sue the EV maker, but dismissed their claims for failure to identify any material misrepresentations because the challenged statements were made before the SPAC and the electric vehicle company had announced or confirmed that they were in merger discussions. Read more.
