Datavault AI Files Federal Lawsuit Alleging Market Manipulation and Defamation

Datavault AI (NASDAQ: DVLT) filed a federal lawsuit Thursday, July 10, in the Northern District of Illinois alleging securities fraud, defamation, and intentional tort tied to naked short selling and online misinformation. The lawsuit represents a significant development in corporate efforts to combat market manipulation tactics that can artificially depress stock prices and mislead investors.

The complaint, filed by law firm Dickinson Wright, names unknown defendants including Does 1-50, Roe Corporations 1-50, and XYZ LLCs 1-50. The legal action claims short sellers used manipulative trading tactics including spoofing, layering, and marking the close while simultaneously spreading defamatory falsehoods on social media platforms including Stocktwits and LinkedIn. These coordinated efforts allegedly created artificial selling pressure and spread misinformation about the company's financial health and business prospects.

Lead counsel Jacob Frenkel, Chair of Dickinson Wright's Securities Enforcement Practice, stated the action is aimed at holding accountable those responsible for conduct that has undermined Datavault AI's stock despite a string of positive disclosures, press releases, and strategic partnerships in 2025. The lawsuit seeks damages and potential civil RICO claims, indicating the company believes the alleged activities may constitute organized criminal behavior under the Racketeer Influenced and Corrupt Organizations Act.

The case highlights growing concerns about market manipulation tactics in the digital age, where social media platforms can amplify false information rapidly. For investors, this lawsuit underscores the importance of distinguishing between legitimate market movements and potentially manipulative activities that can distort stock valuations. The outcome could set important precedents for how companies respond to coordinated short-selling campaigns combined with online misinformation.

For the broader financial industry, this legal action represents another front in the ongoing battle against market manipulation. If successful, it could provide companies with additional legal tools to combat what they perceive as unfair trading practices. The case also raises questions about the responsibility of social media platforms in monitoring and preventing the spread of potentially market-moving misinformation.

Additional information about the lawsuit is available in the company's full press release at https://ibn.fm/rbueY, while ongoing updates relating to DVLT are maintained in the company's newsroom at https://ibn.fm/DVLT. The legal proceedings will be closely watched by market participants, regulatory authorities, and legal experts specializing in securities law and market manipulation cases.