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FRT’s Fast Five: Week Ending September 18, 2020

Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. Nikola Investor Sues After Short-Seller Claims Sink Shares

A Nikola Corp. investor sued the electric vehicle maker, its chairman and two executives over an 11% share price drop that followed a Sept. 10 short-seller’s report. Arab Salem seeks to represent all other shareholders that bought Nikola stock from June 4 to Sept. 9, according to a complaint filed Wednesday in Brooklyn federal court. He accused the company and the executives of making false and misleading statements about Nikola’s operations. The report by Hindenburg Research, a firm that owns a short position in the company’s stock and stands to gain from a decline in the share price, claimed the maker of electric and hydrogen-fuel-cell heavy-duty vehicles made non-working products appear as fully functional. The report also alleges that Nikola staged misleading videos and told “dozens of lies” about its capabilities, partnerships or products, among other issues. Click here to read the full article.

2. Bondholders launch class action against PwC

The country’s largest blue-chip company auditor, PwC, is facing a class action from bondholders of its collapsed audit client Axsesstoday over allegations of shoddy accounting work by the big four consultancy. The action, filed in the Federal Court last month, is the seventh time in the past decade that the firm has been sued over its work on audit clients that later collapsed. It has so far settled four of these. Listed lending company Axsesstoday went into voluntary administration in April 2019 after breaching its loan term conditions and was later sold to an affiliate of private investment firm Cerberus Capital Management for almost $260 million. But a prospectus given to bondholders in June 2018 suggested Axsesstoday was not at risk of breaching any loan or debt obligations, and those investors now want compensation. Click here to read the full article (subscription may be needed).

3. ESG Reporting Issues and Securities Litigation Risk

Investors are increasingly considering the Environmental, Social and Governance (ESG) credentials of publicly listed issuers when making investments. This has put ESG disclosures (including climate change-related disclosures) in annual reports and prospectuses under intense scrutiny, meaning issuers are at risk of investor and activist claims if those disclosures are inaccurate. Experience from other jurisdictions (in particular the US) shows that investors are willing to pursue large-scale group claims against companies for inaccurately representing their ESG credentials, and given the growth in the UK securities litigation market more generally, Clifford Chance anticipates that investors in this jurisdiction are likely to follow suit. Click here to read the full article.

4. How The Pandemic Is Changing Stock Volatility Calculations

The COVID-19 pandemic is causing betas — or the sensitivity of a stock to market movements — to change. The challenges posed by these changes in beta can affect litigation requiring expert analysis of value or damage, including appraisals actions, damage claims related to business interruption, valuations of portfolios of illiquid assets, and damages claims of lost profits. This change in beta heightens the need for attorneys and valuation experts to support their estimate of beta with credible expert analysis. Click here to read the full article (subscription may be needed).

5. Shareholder Derivative Litigation Concerning Diversity in Corporate Leadership Is an Emerging Trend

Jones Day has been tracking a recent spate of lawsuits filed in federal court since early July, relating to an alleged lack of diversity among corporate boards and executive management. These suits are shareholder derivative actions and appear intended to ride the coattails of, and seek to profit from, the current cultural movement in the United States focused on social justice, diversity, and inclusion. Each of these lawsuits generally alleges that the defendant officers and directors made material misstatements and omissions to investors regarding their companies’ professed commitment to achieving and maintaining diversity and inclusion. Click here to read the full article.

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SETTLED CLAIMS  I  PASSIVE GROUP  I  ANTITRUST  I  FUTURE CLAIMS  I  OPT-IN MONITORING  I OPT-OUT MONITORING

Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability, and transparency available. For more information, go to www.frtservices.com.

This communication and the content found by following any link herein are being provided to you by Financial Recovery Technologies (FRT) for informational purposes only and do not constitute advice. All material presented herein is believed to be reliable but FRT makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Opinions expressed in this communication may change without prior notice. Firms should always seek legal and financial advice specific to their unique situation and objectives.

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