Electric Last Mile (ELMS) Investor Settlement
Electric Last Mile (ELMS) settles $2.7M with investors to resolve the claims over the financial misrepresentation.
Outline
Back in 2020, many reports highlighted serious flaws in ELMS's financial statements and auditing practices, which didn’t follow proper accounting rules (GAAP). Following this news, $ELMS significantly fell, and the company faced a lawsuit from investors.
Timeline
On February 1, 2022: ELMS disclosed an internal probe found executives secretly bought shares at big discounts in 2020.
On February 2, 2022: Following this disclosure, $ELMS fell by 51%.
On March 11, 2022: ELMS confirmed an ongoing SEC investigation.
On June 13, 2022: ELMS has filed for bankruptcy.
On June 14, 2023: Investors filed a lawsuit against ELMS by investors alleging securities fraud and misrepresentation.
Background
Despite strong financial performance in June 2021, an internal investigation revealed ELMS failed to record share acquisitions by senior management as compensation, changing its financial results.
These discounted acquisitions in late 2020 should have been recorded as expenses but weren't, causing understated expenses and net losses.
On February 2, 2022, after these issues were disclosed, $ELMS fell by 51%. The investigation also led to the ouster of both co-founders, Jason Luo and James Taylor, from their positions as Executive Chairman and CEO.
Further investigation by the SEC found major problems in ELMS’s financial reporting and auditing.
On June 13, 2022, ELMS announced a bankruptcy filing.
Following that, in 2022, ELMS was sued by investors who claimed the company misled them about its financial state of the company and reporting practices.
What can investors expect now?
Electric Last Mile settles $2.7M with investors to resolve the claims over the financial misrepresentation.
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 below.