EV Firm Mullen Sues Schwab, TD Ameritrade for Inflating Number of Shares

Mullen Automotive Inc. has accused brokerages TD Ameritrade and Charles Schwab of facilitating naked short selling and damaging the electric-vehicle company’s stock price.

Mullen, which plans to make both commercial and passenger electric vehicles, claims the brokerage firms and around 10 individual unidentified broker dealers illegally sold over 34 million “fictitious” company shares and “fully paid-for” stock owned by Mullen shareholders. In a lawsuit filed Tuesday in federal court in New York, Mullen alleges the brokerages, including Fidelity Investments’ National Financial Services, sold those shares without actually borrowing them in the first place.