UPDATED | Lordstown Motors now facing class-action lawsuit as stock slips another 14 percent
Justin Dennis, 18 March 2021
“I don’t think anyone thought that we had actual orders, right? That’s just not the nature of this business,” Lordstown Motors CEO Steve Burns said during an interview this morning on CNBC’s Squawk Box.
LORDSTOWN — Lordstown Motors Corp. is now facing a class action lawsuit from investors alleging executives delivered misleading statements about the company and committed securities violations.
Attorney Drew Legando of Cleveland law firm Merriman, Legando, Williams and Klang LLC filed the suit Monday in Ohio’s Northern District federal court on behalf of Lordstown Motors shareholder Matthew Rico.
Rico purchased 24 shares of Lordstown Motors (NASDAQ: RIDE) between Feb. 18 and March 5, paying in total about $540, according to a shareholder certification filed alongside the complaint. The stock has lost nearly half its value since Rico’s first purchase, which he made just a week after the stock had reached a nearly five-month peak.
At a 47 percent loss, Rico’s shares lost about $250 in value, more than half of which was lost after the short-seller firm Hindenburg Research published a damaging report on the state of the company and accused executives of misleading investors.
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Racketeering Law Makes Its Return to Wall Street
Peter J. Henning
The New York Times 24 October 2019
Prosecutors accused Michael Nowak, who was the head of precious metals trading at the bank, along with Gregg Smith and Christopher Jordan, of organizing the precious metals desk as a RICO enterprise to engage in “spoofing,” as well as wire and bank fraud in which JPMorgan and its customers were the victims
“Spoofing,” which was made a crime by the Dodd-Frank Act, happens when traders are “bidding or offering with the intent to cancel the bid or offer before execution.”
Part 3 in Series on Illegal Naked Shorting’s Role in Stock Manipulation – Prime Brokers and the DTCC Have a Troubling Monopoly on Clearing and Settling Stock Trades
Smith On Stocks, 11 April 2019
I am not going to attempt to show in any detail how the clearing, settlement and depositing of securities system evolved from the crisis of the mid-60s to what is now a totally paperless, electronic system. But briefly, Congress passed legislation in 1971 for two new service organizations, whose objectives were the speeding up the clearance and settlement process. The Depository Trust Company (DTC) was established as the nation’s principal securities depository, with the mission to convert paper certificates to electronic book entries and to immobilize the paper certificates and keep them in a vault at the DTC. (No more shuttling by messengers.) The National Securities Clearing Corporation (NSCC) was established at the same time to speed up clearance and settlement services.
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