Mullen advances in lawsuit over alleged stock manipulation

BREA, Calif. - Mullen Automotive Inc. (NASDAQ: MULN), an electric vehicle manufacturer, announced a legal win as a federal judge ruled against dismissing its lawsuit alleging stock manipulation by several financial entities. The decision, coming out of the United States District Court for the Southern District of New York, enables the case to proceed into the discovery phase. According to InvestingPro data, MULN stock currently trades at $0.12, near its 52-week low, with notably high price volatility. The company’s shares have experienced a significant decline of over 99% in the past six months.

Mullen accuses IMC Financial Markets, Clear Street Markets LLC, UBS Securities, LLC, and unnamed defendants of using high-frequency algorithmic trading to manipulate its stock prices between November 5, 2021, and November 15, 2023. The company claims these activities involved "baiting orders" to artificially lower the share price, affecting market transparency and integrity. InvestingPro analysis reveals the company faces significant financial challenges, with a weak overall Financial Health Score of 0.51 and rapidly diminishing cash reserves. Subscribers can access 18 additional ProTips about MULN’s financial position.

The court acknowledged that Mullen’s allegations distinguished the defendants’ actions from those of typical market participants. The defendants were found to have placed and then canceled a high volume of sell orders, only to purchase the shares at lower prices, a pattern repeated thousands of times.

David Michery, CEO and chairman of Mullen Automotive, expressed satisfaction with the court’s decision, emphasizing the company’s commitment to protecting its interests and those of its shareholders. Stephen W. Tountas, lead lawyer for the plaintiffs, conveyed eagerness to uncover the alleged manipulative trading practices through the discovery process.

This litigation development occurs as Mullen continues to grow its electric vehicle business, with production plants in Mississippi and Indiana and a commercial dealer network across key U.S. markets. The company’s recent milestones include the launch of the Mullen ONE and Mullen THREE electric vehicles, both certified by the California Air Resource Board (CARB) and the EPA.

The information in this article is based on a press release statement. Mullen Automotive has not provided any additional comments beyond the details of the court’s decision and the ongoing litigation.

In other recent news, Mullen Automotive reported a record GAAP revenue of $3.18 million for the quarter ending March 31, 2025. This marks a significant increase from the previous fiscal year’s total revenue of $1.1 million, highlighting substantial growth in the company’s financial performance. Alongside this revenue surge, Mullen announced plans for cost-cutting measures, including staff reductions and facility eliminations, set to begin in April 2025. In a strategic move, the company terminated its agreement with Volt Mobility, which had involved the distribution of Mullen’s commercial electric vehicles in the United Arab Emirates. Furthermore, Mullen has expanded its equity incentive plan, adding 20 million shares for awards, and adjusted CEO performance awards, aligning them with long-term company goals. The company also faces a potential delisting from the Nasdaq Capital Market, having fallen below the required Market Value of Listed Securities for 30 consecutive days. Mullen has until August 25, 2025, to regain compliance with Nasdaq’s listing standards. These developments reflect Mullen’s ongoing efforts to adapt and grow within the competitive electric vehicle market.

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