Electric Last Mile Solutions ($ELMS) $899,000 Investor Settlement

Electric Last Mile Solutions’ investor $899,000 settlement with BDO USA, P.C., resolving claims that ELMS issued false and misleading financial statements and that BDO issued a false audit opinion included in ELMS’s public filings.

Outline:

Investors said ELMS hid that certain executives and directors bought company equity at substantial discounts without an independent valuation. They also said the company’s earlier financial statements were unreliable and later had to be restated. ELMS then disclosed leadership changes after a Special Committee investigation, and the stock fell 51% on February 2, 2022. The new $899,000 BDO settlement would resolve the remaining claims and complete the case if approved.

Timeline:

• June 25, 2021: Electric Last Mile and Forum Merger III Corp. closed the merger that resulted in ELMS.

• November 25, 2021: ELMS’s board formed an independent Special Committee to investigate certain equity sales involving individuals associated with the company.

• January 26, 2022: Based on the Special Committee investigation, the board concluded that previously issued financial statements should be restated and no longer relied upon.

• February 2, 2022: ELMS announced leadership changes, disclosed non-reliance on certain financial statements, and the stock fell $2.88, or 51%, to close at $2.71.

• February 3, 2022: Investors filed the securities class action complaint.

• November 6, 2024: The Court granted final approval of the earlier settlement with the individual defendants.

• March, 2026: The court granted preliminary approval to the stipulation of settlement.

Background:

Electric Last Mile Solutions became public through a merger with Forum Merger III Corp. and traded on Nasdaq under the ticker ELMS. Investors later challenged the company’s financial reporting and disclosures.

Certain executives and directors bought company equity in late 2020 at substantial discounts to market value without obtaining an independent valuation. Plaintiffs also alleged that ELMS’s earlier financial statements were false, unreliable, and needed restatement.

On November 25, 2021, the board formed an independent Special Committee to investigate certain equity transactions and their legal, disclosure, and tax consequences. The company later said James Taylor bought equity in those transactions and Jason Luo participated in and directly or indirectly purchased and sold equity in them.

On February 2, 2022, ELMS announced that Taylor had resigned as CEO and that Luo had resigned as Executive Chairman after the Special Committee investigation. The company also said certain prior financial statements could no longer be relied on and would be restated, and investors say the stock dropped 51% on that news.

The case also accused BDO USA, P.C. of issuing a false audit opinion that was included in ELMS’s public filings. This settlement follows an earlier court-approved deal with the individual defendants and would resolve the remaining claims if approved.

What Can Investors Expect Now?

Electric Last Mile Solutions’ investor $899,000 settlement with BDO USA, P.C., resolving claims that ELMS issued false and misleading financial statements and that BDO issued a false audit opinion included in ELMS’s public filings.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.