A class action lawsuit was filed against Evolv Technologies Holdings (NASDAQ:EVLV) on March 25, 2024. The plaintiffs (shareholders) alleged that they bought EVLV stock at artificially inflated prices between June 28, 2021 and March 13, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought EVLV stock during that period can click here to learn about joining the lawsuit.
Evolv Technologies is a human security and screening company. It uses an industry-leading artificial intelligence (AI)-powered screening platform to detect weapons and intruders, with its solutions utilized across various industries.
The plaintiffs maintain that Evolv and three of its current and/or former senior officers and/or directors, along with two of NewHold Investment Corp.’s senior officers at the time of the SPAC merger, deceived investors by repeatedly lying and withholding vital information about the efficacy of the company’s products.
The information became clear in a series of events between November 2, 2022 and March 13, 2024. Importantly, a report by BBC noted that Evolv told the news agency that it altered its claims about UK testing equipment to “better reflect the process taken.” As per the report, the Securities Exchange Commission (SEC) initiated an investigation into Evolv in February 2024. Further, in October 2023, the company disclosed that the Federal Trade Commission (FTC) was probing its marketing practices.
Interestingly, during the Class Period, the defendants reiterated the efficacy of its flagship touchless security screening system that detects threats instantly and sends an alert immediately to stop the weapons from entering the venue. In an interview with Fox Business in July 2021, the CEO mentioned that Evolv has written the machine learning algorithms for all the guns, all the bombs, and all the large tactical knives in the world, ensuring full safety and security from threats.
As per the class action lawsuit, Evolv Technologies caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business practices and prospects during the Class Period.
Notably, EVLV stock has lost 60.5% since its initial listing in July 2021, causing massive damage to shareholders’ returns.
