The investigation centers on a November 2023 report by J Capital Research, which characterized Microvast as a potential investment trap. Analysts claimed the company withheld news regarding the rescission of a Department of Energy grant for a polyaramid separator facility for months. Beyond the grant controversy, the report questioned the legitimacy of Microvast’s revenue, citing drone footage of inactive Chinese factories and discrepancies in government procurement records.

Microvast currently faces a separate securities class action lawsuit, which survived a motion to dismiss earlier in the proceedings. Kahn Swick & Foti, led by former Louisiana Attorney General Charles C. Foti, Jr., is now vetting whether corporate officers failed shareholders by neglecting to disclose these material risks. The firm is actively seeking input from long-term investors as it evaluates potential legal actions against the company’s board.