MP Materials Corp. - MP f/k/a Fortress Value Acquisition Corp. - FVAC Securities Fraud Class Action

MP Materials investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than April 25, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.

A class action lawsuit has been filed on behalf of those who purchased or acquired MP Materials Corp. (“MP Materials”) (NYSE: MP) f/k/a Fortress Value Acquisition Corp. (“FVAC”) (NYSE: FVAC; FVAC WS; FVAC.U) securities between May 1, 2020 and February 2, 2022, inclusive (the “Class Period”).

Case Background:
MP Materials engages in the ownership and operation of integrated rare earth mining and processing facilities. FVAC operated as a special purpose acquisition company (“SPAC”).  In November 2020, FVAC consummated a merger with MP Mine Operations LLC (“MPMO”) and Secure Natural Resources LLC (collectively with MPMO, “Legacy MP Materials”), whereby, among other things, Legacy MP Materials became an indirect wholly-owned subsidiary of FVAC, and FVAC changed its name from “Fortress Value Acquisition Corp.” to “MP Materials Corp.” (the “Business Combination”). As a result of the Business Combination, MP Materials began to own and operate the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) in California.

The Class Period commences on May 1, 2020, when FVAC filed a prospectus on a Form 424B4 in connection with its initial public offering (the “Prospectus”). With respect to FVAC’s purported business strategy, the Prospectus stated, that: (1) FVAC “intend[s] to deploy a pro-active, thematic sourcing strategy”; (2) “[o]ur selection process will leverage our team’s network of industry, private equity sponsor, credit fund sponsor and lending community relationships as well as relationships with management teams of public and private companies, investment bankers, restructuring advisers, attorneys and accountants”; and (3) FVAC’s management would utilize a “disciplined process of pursuing and reviewing promising leads.”

The truth regarding MP Materials emerged on February 3, 2022, when Bonitas Research published a report (the “Bonitas Report”) accusing MP Materials of executing an “abusive transfer price manipulation scheme” with a related party in People’s Republic of China (“China”), Shenghe Resources Holding Co., Ltd. (“Shenghe”), which owned 7.7% of MP Materials as of March 22, 2021. Specifically, the Bonitas Report alleged that, since the second quarter of 2021, MP Materials and Shenghe “executed an abusive transfer price manipulation scheme whereby Shenghe overpaid for MP [Materials] concentrates to artificially inflate MP [Materials’] profits, [which] conveniently coincided with the SPAC insider lock-up expiration so that MP [Materials] insiders could sell MP [Materials] stock at artificially inflated prices.” In addition, the Bonitas Report cited a September 2019 German academic study that concluded MP [Materials’] ore at Mountain Pass is “not economically viable to harvest for rare earth metals while 12 of the other 13 well known rare earth mines outside of China are economically feasible” at current market prices.  Following this news, MP Materials’ stock price fell $5.61 per share, or 14.25%, to close at $33.75 per share on February 3, 2022.

The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) FVAC had overstated its due diligence efforts and expertise with respect to identifying target companies to acquire; (2) FVAC performed inadequate due diligence into Legacy MP Materials prior to the Business Combination, or else ignored significant red flags regarding, inter alia, Legacy MP Materials’ management, compliance policies, and Mountain Pass’s profitability; (3) as a result, MP Materials’ future business and financial prospects post-Business Combination were overstated; (4) MP Materials engaged in an abusive transfer price manipulation scheme with a related party in China to artificially inflate MP Materials’ profits; (5) MP Materials’ ore at Mountain Pass was not economically viable to harvest for rare earth metals; and (6) as a result, MP Materials’ public statements were materially false and misleading at all relevant times..

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  James Maro, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.