The electric vehicle startup recently said in a regulatory filing with the Securities and Exchange Commission (“SEC”) that orders for its Endurance pickup are non-binding, sending its share price tumbling. Lordstown’s stock dropped as much as 7% after the Company clarified statements by company President Rich Schmidt on June 15, 2021 to the effect that the Company had a large book of binding orders. The Company stated: “Although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments.”

Previously, Company founder and former CEO Steve Burns left Lordstown after the board reportedly determined that he had overstated orders for the Endurance truck with claims of 100,000 pre-orders. This controversy is the subject of a class action lawsuit that has been filed in the United States District Court for the Northern District of Ohio on behalf of investors who purchased or otherwise acquired securities between August 3, 2020 and March 24, 2021, inclusive.

On March 17, 2021, after the market had closed, Lordstown disclosed that the Company had received an inquiry from the SEC regarding accounting issues. Following this disclosure, Lordstown’s stock price fell $2.08 per share on March 18, 2021, a decline of an additional 14%.

Shareholders of publicly-traded companies may have legal remedies in the event of violations of law that cause them losses, possibly including class action litigation and derivative actions. A class action is a legal device that allows one person, or several persons, commonly referred to as the named plaintiff(s) or representative plaintiff(s), to bring a lawsuit on behalf of a much larger group of persons, referred to as “the class.” Class actions serve to promote important public policy goals including providing a mechanism through which the smaller claims of many parties who have suffered some injury (typically small monetary damages) are combined together in a manner that makes bringing litigation economical.

A derivative action is a lawsuit in which a shareholder effectively steps into the shoes of a corporation to assert claims against officers, directors or third parties whose conduct may have harmed the corporation. To assert derivative claims, a shareholder typically must either first make a demand on the Board of a company to assert the claims, and have the litigation demand rejected, or plead facts in a complaint sufficient to show that demand on the Board would be a futile act.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in securities disputes in state and federal court, as well as in arbitration proceedings. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

This article is intended as ATTORNEY ADVERTISING and is not an official notice.

VEREIT (formerly known as American Realty Capital Properties) is one of the largest real estate investment trusts (REITs) in the world. VEREIT was founded in 2010 and is based in Phoenix, Arizona.

In the complaint Vanguard alleges that VEREIT cost investors billions of dollars in a multiyear accounting fraud. From February 2013 to July 2014 VEREIT implemented an “acquisition strategy” purchasing seven major real estate companies at an average of $3 billion. VEREIT’s assets grew from $132 million to $21.3 billion in 2014. During this growth VEREIT allegedly assured investors that its internal controls “were effective” and that the company financial statements “were accurate and could be trusted.”

Investors allege that VEREIT actually did not have an adequate system of controls over its financial reporting and that company financial statements were “riddled with errors.” According to the complaint VEREIT hid its fraud from investors until Oct. 29, 2014 when it disclosed an audit report which “determined that the company ‘intentionally’ misreported and [had] ‘intentionally not corrected’ certain calculations and that prior statements by the company ‘should no longer be relied upon.” After the revelation VEREIT’s stock price fell by 36%.

Non-traded REITs, like VEREIT, carry greater risk than more traditional investments such as stocks and bonds. Because of the greater risk attached to these investments, they are better suited for sophisticated and institutional investors. Broker-dealers have the duty to conduct proper due diligence in order to determine if an investment is suitable for a customer. This includes looking at the investors age, risk tolerance, net worth and investment experience.

If you believe you have been the victim of a possible violation of the securities laws, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities attorney at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

The certiorari petition (which contains the orders appealed from as appendices) is accessible below.

10.6.28 certiorari petition winn v alamo.pdf (332.61 kb)

The Amended Complaint, filed July 17, 2009, alleges that Bank of America aided and abetted Cosmo and Agape’s scheme by:

a. allowing Cosmo, a convicted felon, to open, direct, control and haveextraordinary access to at least two dozen accounts under different names (among which accounts Cosmo regularly made multi-million dollartransfers of funds);

b. enabling Cosmo and Agape to transfer investor funds between different named accounts, in effect, “sweeping” all monies into one account controlled by Cosmo;

c. providing Agape with confidential customer account information for Agape to utilize in soliciting new investors;

d. assigning one or more representatives to work directly out of Cosmo’s office, which was approximately 28 miles from the branch where Agape and Cosmo had their bank accounts;

e. providing its on-site representatives at Agape with bank equipment and/or computer systems to enable them to directly access Bank of America’saccounts and computer systems, monitor and check account balances, accept deposits and issue checks, directly from Agape’s office; and

f. approving and effecting, on a regular basis, transfers of up to $100 milliondollars in wires from Agape’s accounts to commodities and futures trading firms.

The Amended Complaint further alleges that Bank of America provided Agape and Cosmo with this extraordinary assistance even though Bank of America’s onsite representatives had actual knowledge that Cosmo was commingling investor money, diverting investor money to his own accounts, engaging invirtually no legitimate business whatsoever and speculatively trading investor money in the commodities markets as an unregistered commodities pool.

The defendants’ response to the Amended Complaint is due to be filed in the U.S. District Court for the Eastern District of New York on August 31, 2009. The Amended Complaint and the indictment of Cosmo are accessible below.

09.7.17 cac.pdf (147.25 kb)

cosmo indictment.pdf (388.21 kb)

The class action complaint further alleges that Bank of America substantially assisted this fraud as follows: (a) Bank of America assigned one or more representative to work directly out of Cosmo’s office, which was approximately 28 miles from the branch where Agape and Cosmo had their bank accounts; (b) Bank of America provided its onsite representatives at Agape with on site bank equipment and/or computer systems to enable direct access to Bank of America’s accounts and systems; and (c) Bank of America’s onsite representatives at Agape had the ability to monitor and check account balances, accept deposits and issue checks. The class action complaint alleges that based on this arrangement, Bank of America had knowledge of all of Cosmo’s financial activities, including his transfers of funds to commodities accounts to operate Cosmo’s unregistered commodities pool.

The class action complaint can be accessed below.

09.4.17 complaint and civil cover sheet.pdf (697.18 kb)

The transfer order and the complaint in the antitrust class action are accessible below. The case has been assigned to Judge Sam Sparks.

09.3.4 order transferring case to wd tex.pdf (119.42 kb)

08.4.3 class action complaint.pdf (2.48 mb)

Also representing the plaintiffs/appellants was Louis F. Burke, Esq. of Louis F. Burke, P.C. Arguing for defendant/appellee Morgan Stanley was Richard A. Rosen of the firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP.

The complaint that was dismissed by the U.S. District Court and the briefs filed by appellants can be accessed immediately below.

appellants’ brief.pdf (582.79 kb)

reply brief.pdf (152.49 kb)

amended class action complaint.pdf (168.75 kb)