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Electric Last Mile Solutions, Inc. (formerly Forum Merger III Corp.)

Class Action
  • Active
Investigation
02/02/2022
Initial Lawsuit
02/03/2022
Lawsuit Progression
04/22/2022

Investigation

Why the investors investigation? In November and December 2020 (shortly before the company’s December 10, 2020 announcement of a definitive agreement for a business combination with Forum Merger III Corporation), some of Electric Last Mile Inc. executives purchased equity at substantial discounts to market value without obtaining an independent valuation.

The company reveals that its CEO Mr. Taylor “purchased equity in these transactions” and its chairman Mr. Luo “participated in these and other transactions and directly or indirectly purchased and sold equity in such transactions.” Neither executives, nor directors nor the company revealed the transactions until then, while asserting having controls in place.

While Electric Last Miles Solutions disclosed an internal investigation, we have opened an investors investigation. An investors filed a lawsuit on 02/03/2022.

 

  • Investigation Date
    02/02/2022
  • Hypothetical Affected Period
    March 31, 2021 to February 1, 2022
  • Hypothetical Transgression
    Securities Violation
Main Event

Independent Investigation & Restatement

02/01/2022

Company Statement

Electric Last Mile Solutions, Inc. announces resignation of its CEO James Taylor and Jason Luo as executive chairman. The company also disclosed it formed an independent Special Committee to conduct an inquiry into certain sales of equity securities made by and to individuals associated with the company.

“Based on the Special Committee’s investigation, the Company has concluded that in November and December 2020, shortly before the Company’s December 10, 2020 announcement of a definitive agreement for a business combination with Forum Merger III Corporation, certain Electric Last Mile Inc. executives purchased equity in the Company at substantial discounts to market value without obtaining an independent valuation. Mr. Taylor purchased equity in these transactions. Mr. Luo participated in these and other transactions and directly or indirectly purchased and sold equity in such transactions.

In addition, on January 26, 2022, on the basis of the Special Committee investigation, the Board concluded that the Company’s previously issued consolidated financial statements should be restated and, therefore, should no longer be relied upon . . . Although the Company cannot, at this time, estimate when it will file its restated financial statements for such periods, it is diligently pursuing completion of the restatement, including with respect to an evaluation of the Company’s financial statement reserves for tax payments and contingencies.

Mr. Taylor and Mr. Luo will maintain consulting roles with the Company to help ensure that ELMS continues to deliver on its development and sales pipelines.”

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
$2.71 $5.59 $-2.88 -51.52%
See more on Factual Timeline

Initial Lawsuit

This is a class action on behalf of persons or entities who purchased or otherwise acquired publicly traded Electric Last Mile Solutions, Inc. (formerly Forum Merger III Corp.) securities between March 31, 2021 and February 1, 2022, inclusive. See complaint for additional details.

  • Filing Date
    02/03/2022
  • Class Period
    03/31/2021 to 02/01/2022
  • Transgression
    Securities Violation
  • Filing Firms
    The Rosen Law Firm, P.A.
  • Case Title
    Hacker v. Electric Last Mile Solutions, Inc.
  • Docket Number
    2:22-cv-00545
  • 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) Electric Last Mile Solutions, Inc. (ELMS) f/k/a Forum Merger III Corp.’s previously issued financial statements were false and unreliable;
(2) ELMS’s earlier reported financial statements would need restatement;
(3) certain EMLS executives and/or directors purchased equity in the company at substantial discounts to market value without obtaining an independent valuation;
(4) on November 25, 2021 (Thanksgiving), the company’s Board formed an independent Special Committee to conduct an inquiry into certain sales of equity securities made by and to individuals associated with the company; and
(5) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.

Defendants

  • Company
    Electric Last Mile Solutions, Inc. (formerly Forum Merger III Corp.)
  • Chief Executive Officer
    James Taylor
  • Executive Chairman
    Jason Luo
  • Chief Executive Officer
    David Boris
  • Chief Executive Officer
    Marshall Kiev
  • Chief Financial Officer
    Albert Li
  • Chief Financial Officer
    Robert Song

Lawsuit progression

  • Docket Number
    2:22-cv-00545
  • Court
    New Jersey District Court

Lead Counsel

04/22/2022

The court issued an order appointing the lead plaintiff and lead counsel.

Factual Timeline

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