Mullen Automotive (NASDAQ:MULN) stock opened in the green today after the electric vehicle (EV) company announced that it had retained Christian Attar — formally known as Christian Levine Law Group — in partnership with Warshaw, Burstein, LLP as part of its investigation into alleged naked short selling. Mullen notes that Christian Attar has successfully prosecuted market manipulation schemes on behalf of clients in the past, which has resulted in the collection of millions of dollars.
On April 28, Mullen announced that it was working with Shareholder Intelligence Services LLC (ShareIntel) to investigate potential market manipulation and illegal short selling. The decision to retain ShareIntel was made due to “extraordinary trading volume and evidence of unusually high levels of failure to deliver on short sales.”
“Since our announcement on April 28, we have been actively investigating naked short selling and we now have enough intel to have the law firm actively investigate and, where justified, take action against any market manipulators using naked short selling, spoofing or other illegal acts,” said CEO David Michery.
MULN Stock: Mullen Adds Law Firm to Naked Short Selling Investigation
The information obtained by ShareIntel should be critical for Christian Attar to establish a case. ShareIntel operates as an application service provider that helps public companies obtain, track and analyze trading information. The company uses “Data Repository Information Link” (DRIL-Down), its proprietary patent-pending web-based application, to manage its information collection. With its processes, ShareIntel can track equity flows and identify any suspicious activity.
Earlier this year, a Mullen shareholder created a petition urging Mullen to look into market manipulation of MULN stock and to create a board-sponsored “Illegal Trading Task Force.” Today, the petition has over 10,000 signatures.
Mullen has cited failure-to-deliver (FTD) on short sales as one of the reasons for its investigation. FTD occurs when one party in a contract fails to deliver on their obligation. In the case of short sales, FTD can occur when the short seller does not own all or any of the shares at the time of settlement, which results in a default. This default could possibly lead to the creation of phantom shares, which has a dilutive nature.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
