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MP Materials Corp.

Class Action
  • Active
Investigation
02/03/2022
Initial Lawsuit
02/22/2022
Lawsuit Progression
06/27/2022

Investigation

Did MP Materials Corp. (traded MP) mislead investors by overstating the Nov. 2020 business combination? Bonitas Research published a (short position) report alleging inadequate due diligence during the business combination.

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 will update this post as it unfolds.

  • Investigation Date
    02/03/2022
  • Hypothetical Affected Period
    May 1, 2020 to February 2, 2022
  • Hypothetical Transgression
    Securities Violation
Main Event

Short Attack

02/03/2022

SEC Filing

Bonitas Research publishes a short report alleging inadequate due diligence process during the November 2020 business combination, abusive transfer price manipulation scheme “whereby Shenghe overpaid for MP concentrates to artificially inflate MP’s profits” and lack of economic viability.

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
$33.75 $39.36 $-5.61 -14.25%
See more on Factual Timeline

Initial Lawsuit

First Complaint - 02/22/2022

A MP Materials Corp. (“MP”) shareholder filed a federal securities class action lawsuit on behalf of a class consisting of all persons and entities other than defendants that purchased or otherwise acquired MP Materials securities between May 1, 2020 and February 2, 2022, both dates inclusive.

  • Filing Date
    02/22/2022
  • Class Period
    05/01/2020 to 02/02/2022
  • Transgression
    Securities Violation
  • Filing Firms
    Pomerantz LLP
    Wohl & Fruchter LLP
    Muehlbauer Law Office, Ltd.
  • Case Title
    Bernstein v. MP Materials Corp. et al
  • Docket Number
    2:22-cv-00315
  • Court
    Nevada 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:

(i) Fortress Value Acquisition Corp. (FVAC) had overstated its due diligence efforts and expertise with respect to identifying target companies to acquire;

(ii) FVAC performed inadequate due diligence into MP Mine Operations LLC (MPMO) and Secure Natural Resources LLC (SNR) prior to the business combination, or else ignored significant red flags regarding, inter alia, MPMO’s and SNR’s management, compliance policies, and Mountain Pass’s profitability;

(iii) as a result, the company’s 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 the company’s profits;

(v) MP Materials’ ore at Mountain Pass was not economically viable to harvest for rare earth metals; and

(vi) as a result, the company’s public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    MP Materials Corp.
  • Chief Executive Officer
    James H. Litinsky
  • Chief Financial Officer
    Ryan Corbett
  • Chief Executive Officer
    Andrew A. McKnight
  • Chief Financial Officer
    Daniel N. Bass

Lawsuit progression

  • Docket Number
    2:22-cv-00315
  • Court
    Nevada District Court

Lead Counsel

06/27/2022

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

Factual Timeline

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