Autonomous Trucking Company Faces Shareholder Lawsuit
According to a report from Law.com, Embark—an autonomous trucking company with a main headquarters in San Francisco, California—is facing a lawsuit from shareholders. The lawsuit alleges that materially misleading statements were made to investors. Here, our West Palm Beach shareholder dispute attorney discusses the allegations raised in shareholder lawsuit in more detail.
Allegations Raised By Shareholders: Material Misrepresentations Made to Investors
A San Francisco-based company involved in the development of autonomous trucking, Embark is primarily focused on providing self-driving software solutions for truck companies. The firm was originally created as a SPAC (Special Purpose Acquisition Company). A SPAC is a publicly traded company formed solely for the purpose of acquiring or merging with an existing business. Embark merged with an existing company through a SPAC in November of 2021.
The plaintiffs in this case (shareholders) contend that the company’s leadership made false statements and material misrepresentations to actual and prospective investors. The company’s stock performance is extremely poor during the relevant period. The SPAC for Embark opened trading in late 2021 at over $170.00 per share. As of December 21st, 2022, the company traded at less than $3.00 per share—a nearly 99 percent drop in value.
Of course, a drop in value—even an especially sharp one—does not necessarily mean that liability will be imposed against the company. Plaintiffs in a shareholder lawsuit still must establish that they suffered tangible financial losses because of the improper and unlawful conduct of the corporation and/or its officers and directors. The lawsuit against Embark is currently pending in a federal court in Northern California.
Shareholders May Have a Claim for Losses Caused By Material Misrepresentations
Shareholders rely on the representations made by corporate officers, corporate directors, and other key insiders. In Florida, a shareholder may have legal claims damages (investment losses) sustained due to material misrepresentation. Broadly speaking, a material misrepresentation refers to statements that are significant and relevant to a company’s financial performance or business prospects, and that are likely to influence the decisions of shareholders.
Shareholders may bring a legal claim for material misrepresentation under a variety of state and federal laws, potentially including laws such as Securities Exchange Act of 1934, the Securities Act of 1933, and even state consumer protection laws. To bring a claim for a misrepresentation, a shareholder must prove that the company or its representatives made a materially false and/or misleading statement and that they (the shareholder) relied on the statement to their detriment.
Speak to Our South Florida Shareholder Rights Lawyer Today
At Pike & Lustig, LLP, we handle the full spectrum of shareholder rights cases. If you are locked in a shareholder dispute, our attorney is here to help. Reach out to us by phone or connect with us online to arrange your confidential case review. With offices in West Palm Beach and Miami, our business lawyers handle shareholder issues throughout all of South Florida, including in Jupiter, Palm Beach Gardens, Wellington, Fort Lauderdale, Boca Raton, and Coral Gables.