Miner TMC Hit With Suit Over Stock Drop From SEC Filings (1)

Deep-sea miner TMC the Metals Co. is facing a proposed class action for allegedly misleading investors over its debt levels in filings with the SEC that the company later revised.

The complaint, filed Nov. 8 in the US District Court for the Central District of California, seeks to represent a class of people who acquired TMC securites between May 12, 2023, and March 25, 2024. It was filed against the company and its top executives.

According to the complaint, TMC disclosed in a March 25 filing with the Securities and Exchange Commission that the company’s financial statements for the first three quarters of 2023 “should be restated and, accordingly, should no longer be relied upon.”

TMC’s March 25 filing cited the “reevaluation” of whether the proceeds from its 2023 partnership with Low Carbon Royalties Inc. should be classified as debt or deferred income, according to the complaint.

On the news of the company’s revised SEC filing, TMC’s stock price fell 13.23% March 26, according to the complaint.

“Defendants had both the motive and opportunity to commit fraud,” lead plaintiff Thomas Lin said in the lawsuit. “They also had actual knowledge of the misleading nature of the statements they made, or acted in reckless disregard of the true information known to them at the time.”

The complaint brings two claims of Exchange Act violations, seeking class certification and damages.

A TMC spokesperson denied the claims Monday. “We will vigorously defend against these unfounded allegations,” the spokesperson said.

Pomerantz LLP represents Lin and the proposed class.

The case is Lin v. TMC the Metals Co. Inc., C.D. Cal., No. 2:24-cv-09684, complaint filed 11/8/24.