LOS ANGELES - AgEagle Aerial Systems Inc., a commercial drone manufacturer, faces a class action lawsuit in the Los Angeles federal court for allegedly violating federal securities laws under the Securities Exchange Act, according to documents filed on February 26.
The class of AgEagle investors is represented by plaintiff Shawn Lopez, who purchased AgEagle stock and accuses AgEagle of exploiting rumors that it was partnering with online retail giant Amazon for drone package delivery services for its own gain, including to cause stock prices for AgEagle to soar.
The lawsuit describes multiple instances of AgEagle kindling the rumor, including a drone unboxing video from the child of an AgEagle executive that had the AgEagle logo and Amazon logo side by side, and highly publicizing the new AgEagle facility in very close proximity to a new Amazon distribution center in Wichita, Kan.
However, news broke that AgEagle's feeding of the rumors were misleading, as there was not a partnership with Amazon and never had been at all, after the online retail giant came forward to put the rumor to bed, the suit says. The company's stock value then fell by over 36% per share.
AgEagle is accused of touting a "major e-commerce customer" to generate public interest, boost growth and defraud investors.
Defendants also named in the case include AgEagle CEO J. Michael Drozd, CFO Nicole Fernandez-McGovern, AgEagle founder and former board president Bret Chilcott and former CEO Barrett Mooney.
Lopez is represented by the Rosen Law Firm PA of Los Angeles. He is seeking damages deemed proper for each investor.