Rivian class action accuses company of misleading investors

Rivian class action lawsuit overview: 

• Who: Plaintiff Glenn Dietel filed a class action lawsuit against Rivian Automotive, Rivian CEO Robert J. Scaringe and Rivian CFO Claire McDonough. 
• Why: Investors accused Rivian of making false statements about demand for its products and the ability to withstand economic impacts.
• Where: The Rivian investor lawsuit was filed in California federal court.

Investors have filed a Rivian class action lawsuit accusing the automaker of overstating demand for its vehicles and misleading investors on the company’s financial ability to withstand negative economic impacts.

The company did not disclose that customers were canceling orders and demand shrunk due to increased interest rates and that its order bank was greatly reduced, the Rivian investor lawsuit says.

Those factors were likely to, and led to, reduced earnings and vehicle production targets in 2024, the Rivian class actions claims.

The company released fourth quarter numbers and full 2023 financial results on Feb. 21, revealing it expected to produce 57,000 vehicles in 2024 instead of the 80,000 vehicles that analysts expected. 

Rivian’s earnings estimate also went from the expectation of a $2.59 billion loss to a $2.7 billion loss in 2024, which was accompanied by a plan to cut 10% of salaried staff, citing economic uncertainty, the lawsuit says.

Rivian investor lawsuit: Stock price fell more than 25% after financial report

The negative financial report led Rivian’s stock price to fall by $3.94 per share, or 25.6%, to close at $11.45 per share on Feb. 22.

“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages,” the Rivian investor lawsuit says.

Rivian CEO Robert J. Scaringe and Rivian CFO Claire McDonough are also named as defendants in the case. The Rivian class action claims Scaringe and McDonough knew the financial condition of the company with information not available to the public, yet allowed materially false and misleading positive representations to be made public about the company’s financial position.

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The plaintiff is represented by Jennifer Pafiti of Pomerantz LLP and Peretz Bronstein of Bronstein, Gewirtz & Grossman LLC. 

The Rivian class action lawsuit is Dietel v. Rivian Automotive Inc, et al., Case No. 2:24-cv-03269, in the U.S. District Court for the Central District of California.

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