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TMC.US
id: 1385
The Metals Company (TMC) Financial Misclassification Case
C.D. California
Court2:24-cv-09684
Case number06/11/2024
Class period Start11/03/2024
Class period End01/07/2025
Lead Plaintiff motion deadline- $TMC investors have filed a claim against TMC for misleading them about its financial reporting and internal controls.
- Following disclosures on March 25, 2024, $TMC dropped by 13.23%.
Case Details:
In February 2023, TMC entered into a strategic partnership with Low Carbon Royalties, selling a 2% royalty on future revenue from its NORI project in exchange for $5 million in cash and a 35% equity stake in LCR.
Throughout 2023, TMC reported its financial results based on this transaction, classifying the royalty payments as deferred income.
However, in March 2024, TMC disclosed that it had made an accounting error.
Following discussions with its auditors and legal advisors, the company admitted that the transaction should have been classified as debt rather than deferred income.
This required TMC to restate its financial statements for the first three quarters of 2023, as the misclassification had overstated its financial stability during this period.
This disclosure caused $TMC to drop over 13%.
Based on these events, $TMC investors filed a claim against TMC, accusing the company of the following:
- It wrongly recorded revenue as deferred income, making its finances look better than they were.
- The company also failed to disclose weaknesses in its internal financial controls.
Considering all the representations, investors suspect TMC misled them about its financial stability by misclassifying revenue and hiding issues with financial controls.
Case Status
Lead Plaintiff Appointed
Alleged Offence
Misleading Statements,
Financial Misrepresentation
Suspected Party
Management
Security Type
Depository Securities (ADS, ADR, GDR)
Trade Direction
Long
Shock Event Date
03/25/2024
Filing date
11/07/2024
Lead Plaintiff Deadline
01/07/2025
Judge
J. Paul Oetken