MP - Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against MP Material Corp. (MP)
NEW YORK, Feb. 23, 2022 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against MP Materials Corp. (f/k/a Fortress Value Acquisition Corp.) (“FVAC”) (“MP Material” or the “Company”) (NYSE: MP) in the United States District Court for the District of Nevada on behalf of investors who purchased the Company’s common stock between May 1, 2020 and February 2, 2022, both dates inclusive (the “Class Period”).
The Complaint alleges that Defendants made false and misleading statements and failed to disclose that: (i) FVAC had overstated its due diligence efforts and expertise with respect to identifying target companies to acquire; (ii) FVAC performed inadequate due diligence into Legacy MP Materials prior to the business combination, or else ignored significant red flags regarding, among other things, Legacy MP Materials’ management, compliance policies, and Mountain Pass’ profitability; (iii) as a result, MP Materials’ future business and financial prospects post-business combination were overstated; (iv) MP Materials engaged in an abusive transfer price manipulation scheme with a related party in the People’s Republic of China to artificially inflate MP Materials’ profits; (v) MP Materials’ ore at Mountain Pass was not economically viable to harvest for rare earth metals; and (vi) thus, MP Materials’ public statements were materially false and misleading at all relevant times.
On February 3, 2022, Bonitas Research published a report accusing MP Materials of executing an “abusive transfer price manipulation scheme” with a related party in China, Shenghe Resources Holding Co., Ltd. (‘Shenghe’), which owned 7.7% of MP Materials as of March 22, 2021. Specifically, the report alleged that, since the second quarter of 2021, MP Materials and Shenghe “executed an abusive transfer price manipulation scheme whereby Shenghe overpaid for MP [Materials] concentrates to artificially inflate MP [Materials’] profits, [which] conveniently coincided with the SPAC insider lock-up expiration so that MP [Materials] Insiders could sell MP [Materials] stock at artificially inflated prices.” In addition, the report cited a September 2019 German academic study that concluded MP Materials’ ore at Mountain Pass is “not economically viable to harvest for rare earth metals while 12 of the other 13 well known rare earth mines outside of China are economically feasible” at current market prices. On this news, MP Materials’ stock price fell by more than 14%, damaging investors.
Investors who purchased or otherwise acquired shares of MP Material should contact the Firm prior to the April 25, 2022 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
Please visit our website at http://www.gme-law.com for more information about the firm.