It is alleged the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about Lucid’s business and operations. Specifically, it has been alleged that Lucid overstated its production capabilities while concealing that extraordinary supply chain and logistics challenges were hampering Lucid’s operations.
Lucid, develops luxury all-electric passenger vehicles. Lucid, in its current form, results from a July 2021 merger (the “Merger”) between Atieva, Inc. d/b/a Lucid Motors (“Atieva”), a start-up electric vehicle manufacturer, and CCIV, a special purpose acquisition company (“SPAC”). The Company’s debut vehicle is the “Lucid Air.”
On February 22, 2021, Atieva and CCIV issued a press release announcing that they had entered into a merger agreement (the “Merger Agreement”). Pursuant to a merger in July 2021, Atieva merged with a subsidiary of CCIV (the “Merger”), surviving the Merger and becoming a wholly-owned subsidiary of CCIV. In connection with the Merger, CCIV changed its name to Lucid Group, Inc. (“Lucid”).
The press release announcing the Merger cited an investor presentation on Atieva’s website, which was also filed with the SEC. The investor presentation represented that Atieva would produce 577 Lucid Airs in 2021, 20,000 EVs in 2022, and 49,000 EVs in 2023 (including 12,000 of the Company’s Project Gravity SUV, an electric SUV, which would purportedly launch that year), with production commencing in the second half of 2021. Throughout the Relevant Period, the Individual Defendants caused the Company to repeatedly assure investors that Lucid’s production capacity was expanding and the Company would meet the production targets shown in that investor presentation.
On February 22, 2022, however, the Company disclosed that the prior statements and assurances were false by announcing that it: (1) had only delivered approximately 125 EVs in 2021 and still had only produced approximately 400 EVs by February 28, 2022; (2) would only produce between 12,000 and 14,000 EVs in 2022; and (3) would delay the launch of the Lucid Gravity until 2024.
As alleged, the Individual Defendants’ materially false and misleading statements concerning the timing and number of vehicles to be produced artificially inflated the price of the Company’s stock during the Relevant Period. As a consequence, two securities class actions have been filed in the United States District Court for the Northern District of California against the Company and certain of its officers and directors, Mangino v. Lucid Group, Inc., et al., Case No. 3:22-cv- 02094-JD (N.D. Cal.) and Goel v. Lucid Group, Inc., et al., Case No. 3:22-cv-03176-JD (N.D. Cal.) (collectively, the “Securities Class Actions”), alleging that Lucid and certain of the Individual Defendants violated the federal securities laws. The Securities Class Actions have exposed the Company to substantial class-wide liability. In addition, on December 6, 2021, the Company filed a Form 8-K with the SEC disclosing that it had received a subpoena from the SEC on December 3, 2021 (the “SEC Subpoena”), exposing Lucid to potential regulatory liability. To the extent that the Company has been required to defend itself in the Securities Class Actions and respond to the SEC Subpoena because of the Individual Defendants’ wrongdoing, the Individual Defendants have wasted the corporate assets of the Company. In addition, as alleged, the Individual Defendants engaged in massive insider trading during the Relevant Period based on undisclosed adverse information about Lucid, and were unduly compensated while engaged in wrongful conduct, therefore, the Individual Defendants have been unjustly enriched at the Company’s expense.
To learn more about this action, contact us today!