MoneyLion hit with two lawsuits

Here come the lawsuits. Mobile banking fintech MoneyLion (NYSE:ML) was hit with two separate suits in July.

Why it matters: As once-glitzy valuations dull into lackluster investment returns, startup lawsuits are increasing.

Driving the news: The first suit is from the founders of Malka Media Group— a content company that MoneyLion acquired for about $40 million in cash and stock — alleging the neobank owes them $35 million in additional earnouts.

• Specifically, the suit says MoneyLion would not give Malka's founder's access to $10 million in shares owed for hitting 2021 targets and that it has not delivered $25 million in 2022 earnouts, disputing the calculation methodology.
• "MoneyLion has continuously employed delay tactics to drag out the resolution process, including refusing to provide any written response to the Seller Members' objections to MoneyLion's financial adjustments and refusing to retain an Independent Accountant," the lawsuit reads.

Of note: The second lawsuit — filed by Canaan, Prime Capital Partners, GreatPoint Ventures and MassMutual Ventures — alleges MoneyLion made false statements about its March reverse stock split.

• The split, per the Series A preferred stock shareholders, stripped them of rights and preferences.

Context: MoneyLion was valued at $2.9 billion in its 2021 SPAC merger deal. It's now sitting at $109 million.

The big picture: Lawsuits are proliferating.

• Authentic Brands Group sued Bolt last year, settling months later by taking shares in the one-click checkout company.
• Investor Activant Capital then sued Bolt founder Ryan Breslow in July, claiming that he illegally fired three directors and took $30 million from the business as part of a loan scheme.
• Minority-focused neobank Greenwood similarly has been hit by a lawsuit from the Gathering Spot, a company it acquired in 2022, over unpaid earnouts.

What they're saying: MoneyLion said both lawsuits are "meritless," in a statement.

• "We will defend ourselves vigorously in court and set the record straight," a spokesperson wrote in an email regarding the investor suit.
• "MoneyLion believes that the Seller Members are not entitled to any portion of the 2022 Earnout Payment," the spokesperson said of the Malka case.