A securities class action has been filed in the USDC, S.D.FL. against LMP Automotive Holdings, Inc. (LMPX) on behalf of persons and entities that purchased or otherwise acquired LMP securities between June 29, 2021 through May 19, 2022.
On May 19, 2022, after the market closed, LMP announced that it would restate previously issued financial statements for the first three quarters of 2021 due to: “(i) the improper identification and elimination of intercompany transactions, (ii) incorrect estimates of chargeback reserves for finance insurance products, and (iii) certain financial statement misclassifications.”
On this news, LMP’s stock fell sharply.
The Complaint 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:
- that the Company engaged in the improper identification and elimination of intercompany transactions;
- that the Company used incorrect estimates for chargeback reserves for finance and insurance products;
- that the Company had misclassified certain items in its financial statements which impacting balance sheet and income statement financial statement captions;
- that there were material weaknesses in LMP’s internal control over financial reporting;
- that, as a result of the foregoing, the Company overstated its revenue;
- that, as a result of the foregoing, the Company would restate certain of its previously issued financial statements and results; and
- 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.