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 complaint, filed by law firm Dickinson Wright, names unknown defendants identified as Does 1-50, Roe Corporations 1-50, and XYZ LLCs 1-50, claiming these short sellers employed manipulative tactics including spoofing, layering, and marking the close while simultaneously spreading defamatory falsehoods on social media platforms Stocktwits and LinkedIn.

The lawsuit seeks substantial damages and includes potential civil RICO claims, representing a significant escalation in the company's efforts to combat what it describes as coordinated market manipulation. Lead counsel Jacob Frenkel, Chair of Dickinson Wright's Securities Enforcement Practice, emphasized that the legal action aims to hold accountable those responsible for conduct that has undermined Datavault AI's stock performance despite what the company characterizes as a string of positive disclosures, press releases, and strategic partnerships throughout 2025.

This legal action highlights growing concerns about market manipulation tactics in the digital age, particularly the intersection of traditional securities fraud methods with modern social media platforms. The allegations of naked short selling combined with coordinated online misinformation campaigns represent a sophisticated approach to influencing stock prices that regulators and companies are increasingly confronting across financial markets.

The implications of this lawsuit extend beyond Datavault AI's immediate circumstances, potentially setting precedents for how courts handle cases involving social media-based market manipulation. For investors and market participants, the case underscores the evolving challenges in maintaining market integrity when traditional manipulation techniques merge with digital communication platforms. The company's technology platform, which focuses on AI experience, valuation, and monetization of assets in the Web 3.0 environment, has been developing comprehensive solutions through its Acoustic Science and Data Science Divisions.

Datavault AI's cloud-based platform serves multiple industries including sports and entertainment, biotech, education, fintech, real estate, healthcare, and energy through HPC software licensing. The company's Information Data Exchange enables Digital Twins and licensing of name, image, and likeness by securely attaching physical real-world objects to immutable metadata objects. Additional information about the company is available at https://www.datavaultsite.com while updates relating to DVLT are accessible through the company's newsroom at https://ibn.fm/DVLT.

The outcome of this litigation could influence how companies address similar market manipulation challenges and may prompt regulatory scrutiny of the intersection between social media activity and securities trading. For the broader investment community, the case serves as a reminder of the complex risks present in modern financial markets where digital communication can rapidly influence stock performance regardless of underlying corporate fundamentals.