Mullen Stock Forecast: Spoofing lawsuit could rake in ‘billions’, says lawyer

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• Mullen said its new spoofing complaint will replace its short-selling litigation announced in August.
• Law firm says spoofing litigation could amounts to “billions” in compensation.
• MULN trades lower for fourth consecutive session on Friday.
• Support may hold at $0.15 while traders wait for December 15 shareholder vote.

Mullen Automotive (MULN) stock is losing ground for the fourth session in a row on Friday despite the broader market seeing gains across categories. MULN stock is down 3.6% at the time of writing on Friday afternoon, trending as low as $0.1478 before climbing back above $0.15. All three major indices – Dow Jones, S&P 500 and NASDAQ Composite – rise above 0.3%.

Nonfarm Payrolls for November were released before the market open on Friday and led to some selling initially. The report said there were 199K new hires last month, which was well above the 180K consensus, and the Unemployment Rate ticked down from 3.9% to 3.7%. A tighter labor market had investors concerned that the Federal Reserve would be less likely to cut interest rates on the perceived schedule.

The University of Michigan Consumer Sentiment Index, however, saved the day when it came in at 69.4. This was much higher than the 62 consensus figure, and markets have rallied on news that the US consumer is growing much more optimistic.

Mullen Automotive stock news: Mullen once more attacks MULN manipulation

On Friday morning, Mullen announced it had filed a new spoofing complaint against several broker-dealers it contends have been involved in manipulating its stock price over the past two years.

The complaint, filed in US District Court for the Southern District of New York on Wednesday, alleges that UBS Securities, IMC Financial Markets and Clear Street Markets engaged in or allowed spoof trading that manipulated the MULN share price.

Spoofing occurs when rogue traders submit large market orders but cancel them before being executed. By creating false supply or demand signals in the market, traders can initiate price movement without taking a resulting position. Spoofing is often associated with high-frequency trading schemes. 

“[Mullen] believes that the spoofing litigation has exponentially greater potential to recover damages based on the nature of the claims and the duration of the 2-year period when the spoofing is alleged to have occurred. In connection with the decision to file the spoofing complaint, the [Mullen] has voluntarily dismissed the lawsuit originally filed on Aug. 29, 2023,” Mullen said in a statement, ending its earlier short-selling litigation in favor of the spoofing lawsuit.

The latest news follows on the heels of Mullen’s Wednesday announcement that its legal representatives had uncovered evidence of spoofing that had led to 5 billion MULN shares trading at artificially-deflated prices in the two years following its debut on the NASDAQ exchange in November 2021.

“In the 21 years our team has been prosecuting market manipulation cases against Wall Street, I believe this could be one of the largest and strongest spoofing and market manipulation cases we have handled,” said Wes Christian of Christian Attar Group, one of the two law firms working in conjunction on the litigation. “After working with our consulting and investigative experts, I believe the damage model could be in the billions of dollars.”