Carvana Co.

Investigation
06/24/2022

Initial Lawsuit
08/03/2022

Lawsuit Progression
10/03/2022

Investigation

Continous Holding
May 6, 2020 to June 24, 2022
Proposed Claim
Securities Violation

Did Carvana Co. (CVNA) mislead investors regarding the registration of its cars and the legality of its sales/delivery process in the U.S.?

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed. We update this post regularly.

Main Event

Barron's Take on the "undriveable-car task force"

06/24/2022

News Outlets

Barron’s publishes an investigative article about Carvana entitled “Carvana Sought to Disrupt Auto Sales. It Delivered Undriveable Cars” depicting problems at the company.

“In its haste to seize market share from competitors, Carvana was selling cars faster than it could get them registered to their new owners . . . Barron’s interviews with Carvana customers and former employees shed light on why registrations were delayed and how state regulators have tried to address the issue. The reporting reveals a company scrambling to address the problem, at one point forming an ad hoc unit known as the “undriveable-car task force.””

“In other instances, though, including Burton’s, Carvana sold cars before it had title to the vehicles, an action that is illegal in many states where the company does business.”

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close	Previous close	Price variation	Percentage variation
$30.34	$31.52	$-1.18	-3.74%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 08/03/2022

A Carvana Co. (CVNA) investor filed a class action lawsuit on behalf of persons or entities who purchased or otherwise acquired publicly traded Carvana securities between May 6, 2020, and June 24, 2022, inclusive.

Filing Date
08/03/2022
Class Period
05/06/2020 to 06/24/2022
Transgression
Securities Violation
Filing Firms
The Rosen Law Firm, P.A.
Case Title
BRENT v. CARVANA CO. et al
Docket Number
2:22-cv-04870
Court
New Jersey District Court
Free File
Complaint

Allegations

According to the complaint, 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 allegedly failed to disclose to investors that:

(1) Carvana faced serious, ongoing issues with documentation, registration, and title with many of its vehicles;
(2) as a result, Carvana was issuing unusually frequent temporary plates;
(3) as a result of the foregoing, Carvana was violating laws and regulations in many existing markets;
(4) as a result of the foregoing, Carvana risked its ability to continue business and/or expand its business in existing markets;
(5) as a result of the foregoing, Carvana was at an increased risk of governmental investigation and action;
(6) Carvana was in discussion with state and local authorities regarding the above-stated business tactics and issues;
(7) Carvana was facing imminent and ongoing regulatory actions including license suspensions, business cessation, and probation in several states and counties including in Arizona, Illinois, Pennsylvania, Michigan, and North Carolina; and
(8) as a result, the defendants’ statements about Carvana’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.