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On September 10, 2025, Judge Julie S. Sneed of the Middle District of Florida denied a motion to dismiss a putative securities class action brought against an autonomous vehicle technology company (the "Company") and its CEO.Alms v. Luminar Technologies, Inc., et al., 6:23-cv-982-JSS-LHP (M.D. Fla. Sept. 10, 2025). Plaintiffs alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by allegedly making false statements regarding plans to economize the Company's newly developed technology.
The Court previously granted defendants' motions to dismiss plaintiffs' previous complaint (we covered the previous decisionhere), finding that plaintiffs failed to adequately plead materiality and scienter. In the third amended complaint, plaintiffs included additional alleged factual support from a confidential witness—a senior executive assistant who aided the CEO with the investor presentation—and an expert in electronics and photonics. Based on these new allegations, the Court denied defendants' motion.
Plaintiffs alleged that defendants made a material misstatement of fact in a presentation to the Company's investors by including an image of a competitor's "much more sophisticated looking" photonic integrated circuit ("PIC") microchip. Plaintiffs alleged that once the news was made public in a Forbes article, the Company's stock price began to drop, which ultimately caused the shareholders' alleged losses.
The Court held that plaintiffs adequately alleged that the CEO made a material misstatement in the presentation, despite the fact that he did not explicitly reference the challenged image because "the challenged image was meant to be an assertion about the [C]ompany's progress." The Court reasoned that the key issue was whether the CEO had ultimate authority over the slide deck, and to this end, the Court emphasized alleged factual support provided by the confidential witness allegation that the CEO actively participated by approving and presenting the slides to investors in which all embedded images except the challenged image were pulled from the Company's internal media repository.
Addressing materiality, the Court held that the supplemental factual allegations attributed to the photonics expert adequately explained the significance of and technical differences between the competitor's PIC microchip and the Company's purportedly less sophisticated chip. Accordingly, the Court held that plaintiffs adequately alleged that the challenged image was material, as it would likely alter the "total mix" of information that a reasonable investor would rely on.
Turning to scienter, the Court held that the expert report and confidential witness allegations included for the first time in the third amended complaint elevated the inference of scienter as those allegations suggested that the CEO possessed knowledge of the facts, or at least knew or should have known that displaying the image would misrepresent material facts. The Court held that while it is still possible, as defendants contended, that a lower-level employee included the challenged image on their own initiative, plaintiffs satisfied the burden of showing that the inference of scienter is "at least as" compelling as defendants' innocent explanation. Accordingly, the Court denied defendants' motion to dismiss in its entirety.
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