#United States #California #TMC the Metals Company #class action lawsuit #Pomerantz LLP

Shareholder Alert: Class Action Lawsuit Against TMC the Metals Company

Overview

On December 9, 2024, Pomerantz LLP announced the initiation of a class action lawsuit against TMC the metals company Inc. (NASDAQ: TMC) in the United States District Court for the Central District of California. This legal action targets the company and certain individuals for alleged violations of federal securities laws, specifically relating to information that misled shareholders during the investment period from May 12, 2023, to March 25, 2024.

Background

The class action is brought forth on behalf of all individuals and entities who purchased or acquired TMC's securities during the specified timeframe. Shareholders are seeking to recuperate damages attributed to the alleged false and misleading statements made by the company’s management. The law firm cited various deficiencies in the company's financial reporting, notably regarding the recognition of revenue from the LCR Partnership — a deal struck in February 2023 involving an agreement that granted Low Carbon Royalties Inc. a 2% gross overriding royalty on TMC's project area.

Allegations Against TMC

According to the complaint, the defendants purportedly made materially incorrect statements concerning the company's financial health and operational policies. The key points of contention include:

• - Deficient Internal Controls: Allegations surfaced that TMC maintained poor internal controls over their financial reporting, leading to misclassifications of liabilities and revenue.
• - Misclassification of Revenue: The transaction with Low Carbon Royalties Inc. was inaccurately recorded. Instead of being classified correctly, the agreement’s future revenue was misrepresented as deferred income rather than debt.
• - Restatement of Financials: Following the misclassification discovery, TMC indicated that it would need to restate its financial statements from the first three quarters of 2023, undermining the reliability of prior reports.

On March 25, 2024, TMC disclosed to the SEC that its earlier financial reports could no longer be trusted due to a reassessment of how the proceeds from its dealings with LCR should be recorded. This restatement led directly to a 13.23% drop in TMC's stock price, closing at $1.345 per share the following day.

Next Steps for Shareholders

Shareholders who feel affected by these disclosures have a limited window to act. According to Pomerantz, those who purchased TMC shares during the Class Period must apply to be appointed as Lead Plaintiff by January 7, 2025. Those interested can obtain the complaint and further details from the firm's website at www.pomerantzlaw.com.

Conclusion

Pomerantz LLP is a well-respected entity known for its focus on corporate, securities, and antitrust class actions. With extensive experience in advocating for victims of securities fraud and corporate misconduct, the firm seeks to secure justice for those impacted by TMC’s alleged misrepresentations. For further inquiries or to discuss the claims, potential class members are encouraged to reach out to the firm directly.

In these times of increasing scrutiny on corporate governance and transparency, this lawsuit reflects broader concerns about accountability within publicly traded companies. Stakeholders and investors attention to this case could have significant implications, not only for TMC but for practices across the industry.