LMPX CLASS ACTION NOTICE: The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against LMP Automotive Holdings, Inc.
LOS ANGELES–(BUSINESS WIRE)–$STOCKS—The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Southern District of Florida, captioned Nguyen v. LMP Automotive Holdings, Inc., et al., Case No. 22-cv-61019, on behalf of persons and entities that purchased or otherwise acquired LMP Automotive Holdings, Inc. (“LMP” or the “Company”) (NASDAQ: LMPX) securities between June 29, 2021 and May 19, 2022, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have until July 26, 2022 to move the Court to serve as lead plaintiff in this action.
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On November 16, 2021, after the market closed, LMP filed a notification of inability to timely file its quarterly report for third quarter 2021. It also identified several material weaknesses in its internal control over financial reporting, including that “[t]he Company did not maintain a formalized set of accounting policies” and “[t]he Company did not maintain effective controls over the review and approval of journal entries, account reconciliations, review of significant accounts and disclosures, and adequate documentation of management assumptions, estimates and judgments.”
On this news, the Company’s stock price fell $0.74, or 5.5%, to close at $12.66 per share on November 17, 2021.
Then, on March 31, 2022, LMP revealed that it could not timely file its fiscal 2021 annual report “primarily [as] a result of its ongoing evaluation of (i) the proper identification and elimination of intercompany transactions, (ii) estimates of chargeback reserves for finance and insurance products and (iii) various financial presentation matters related to the Company’s business, including as it relates to the presentation, characterization and amounts of such items in prior fiscal quarters.”
On this news, the Company’s stock price fell $0.19, or 3.8%, to close at $4.81 per share on April 1, 2022.
Then, on May 17, 2022, after the market closed, LMP disclosed that it could not timely file its Q1 2021 quarterly report due to the previously announced ongoing evaluation. LMP further disclosed that due to errors in the Company’s quarterly reports during fiscal year 2021, such reports “will likely need to be restated.” The Company also disclosed that these errors may impact “certain previously disclosed material weaknesses in the registrant’s controls over financial reporting.”
On this news, the Company’s stock price fell $0.07 per share, or 1.5%, to close at $4.60 per share on May 18, 2022.
Then, on May 19, 2022, after the market closed, LMP revealed that it would restate the financial statements for quarterly periods in fiscal 2021 “primarily due to the following errors: (i) the improper identification and elimination of intercompany transactions, (ii) incorrect estimates of chargeback reserves for finance and insurance products, and (iii) certain financial statement misclassifications impacting various balance sheet and income statement financial statement captions in the Relevant Periods.” These results caused a decrease in total revenues up to $15 million for third quarter 2021, up to $8 million for second quarter 2021, and up to $1 million for first quarter 2021. As a result, the Company stated that “material weaknesses exist in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective.”
On this news, the Company’s stock price fell $0.20 per share, or 4.4%, to close at $4.26 per share on May 20, 2022.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company engaged in the improper identification and elimination of intercompany transactions; (2) that the Company used incorrect estimates for chargeback reserves for finance and insurance products; (3) that the Company had misclassified certain items in its financial statements which impacted balance sheet and income statement financial statement captions; (4) that there were material weaknesses in LMP’s internal control over financial reporting; (5) that, as a result of the foregoing, the Company overstated its revenue; (6) that, as a result of the foregoing, the Company would restate certain of its previously issued financial statements and results; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased LMP securities during the Class Period, you may move the Court no later than July 26, 2022 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased LMP securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to email@example.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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