| CASE CAPTION
||In re Ideanomics, Inc. Securities Litigation
||United States District Court for the Southern District of New York
| CASE NUMBER
||The Honorable George B. Daniels
||Ideanomics, Inc. (Ideanomics or “the Company”), Alfred Poor, Bruno Wu, Connor McCarthy, and Anthony Sklar (“Individual Defendants”
| CLASS PERIOD
||March 20, 2020 – June 25, 2020
This securities fraud class action arises out of Defendants’ misrepresentations and omissions concerning the existence and operations of Ideanomics’ flagship electric vehicle (EV) sales hub, dubbed the “Mobile Energy Global (MEG) Center.” During the class period, Defendants issued a deluge of press releases, and made numerous statements on interviews and earnings calls promoting the MEG Center as a one million square foot facility focused on the sale and conversion of EV fleet vehicles. Defendants also made statements touting the volume of sales attributable to the MEG Center and the associated MEG business unit, claiming that it would account for the majority of Ideanomics’ revenues in 2020. Concurrent with their promotion of the MEG Center, Defendants entered into numerous equity financing arrangements with a third party to retire existing, underwater, equity debt financing extended by insiders to Ideanomics, including by affiliated companies to Defendant Wu. These financiers received Ideanomics stock at discounted rates in exchange for loans to the Company. As Ideonomic’s stock price popped, those shares were traded into the market.
On June 26, 2020, in response to a report issued by market analysts the previous day refuting Ideanomics’ claims concerning the existence of the MEG Center and Ideanomic’s presence at the site, Ideanomics admitted that the MEG Center was only a quarter of the size originally claimed, and now claimed that it was supposedly part of a pre-existing used vehicle market, being utilized by Ideanomics through a partnership with the city of Qingdao, China. Ideanomics claimed to have committed to rename the supposed Qingdao facility as the MEG Center at a later date, thereby further acknowledging that despite what was said in numerous interviews and press releases, there was no 1one million square foot MEG Center at the time Defendants made their inflationary statements to the market. Plaintiff’s own post-class period investigation on the ground in China has revealed no MEG Center at the site that Defendants claimed a million square foot operation already existed, that the site is occupied by numerous other businesses, and that hastily erected promotional banners inside and outside of the Qingdao facility still claim that the MEG Center is “coming soon.”
Lead Plaintiff filed an amended complaint on February 26, 2021 alleging violations of Section 10(b) of the Securities Exchange Act against all Defendants, and violations of Section 20(a) of the Exchange Act against the Individual Defendants. As alleged, Defendants’ June 26, 2020 admissions following the previous day’s analyst reports caused Ideanomics’ per-share share price to drop from $3.09 per share to $1.46, a 53% decline.
Briefing on Defendants’ motion to dismiss the amended complaint was completed on July 15, 2021. Oral argument for this matter was held on October 12, 2021, before the Hon. George B. Daniels of the United States District Court for the Southern District of New York.