- The law firm of Bernhard Liebhard LLP has filed a class action lawsuit against Rivian in California district court.
- The firm alleges that the automaker failed to disclose important information to investors.
- Bernstein Liebhard is still looking for a lead plaintiff to represent the class.
Like other electric vehicle startups, Rivian’s stock has been on a downward trajectory since it went public. That has some investors upset, and the law firm of Bernstein Liebhard LLP announced this week that it has filed a securities class action lawsuit on investors’ behalf.
The firm claims that the automaker violated the Securities Exchange Act of 1934, and is looking for people who purchased securities in Rivian Automotive, Inc. between March 1, 2023, and February 21, 2024, to join its suit.
Read: Rivian Lays Off More Workers As Stock Prices Tank
Bernstein Liebhard’s complaint alleges that the automaker failed to disclose four significant pieces of information to investors. Firstly, the law firm asserts that Rivian overstated demand for its products and its ability to withstand negative macroeconomic trends in the market.
Secondly, it claims that the automaker’s business experienced weakening demand and high customer cancellations. Thirdly, this led to Rivian’s order banks shrinking, which negatively impacted the company’s anticipated earnings, according to the lawsuit.
Rivian did not immediately respond to a request for comment, but the automaker has faced difficulties of late. In February, it cut its workforce by 10 percent, reported a fourth-quarter net loss of $1.52 billion, and has seen its share price fall more than 50 percent so far this year.
However, whether the automaker failed to disclose that information, as Bernstein Liebhard suggests, is less clear. In its complaint, the firm argues that Rivian’s forecasts for 2024 are significantly lower than analysts expected. Whether that’s the automaker’s fault will have to be decided by the courts.
Bernstein Liebhard says it is still looking for a lead plaintiff to represent the class, who must move to court by June 18, 2024. The firm’s suit has been filed in the United States District Court for the Central District of California.
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