Cyngn

Kurta Law wants to speak with investors whose brokers recommended that they buy shares of Cyngn, Inc. (NASDAQ: CYN). These investments were high risk, and brokers who recommend overly risky investments may have violated securities rules and regulations, including Regulation Best Interest and FINRA Rule 2111. FINRA Rule 2111 specifically states that an investment must fit an investor’s age, financial goals, and risk tolerance.  

Contact a securities attorney if you believe you may have lost money as a result of a broker’s unsuitable investment recommendation. Call (877) 600-0098 or email info@kurtalawfirm.com.  

What is Cyngn Inc.?  

At the time of filing the prospectus, Cyngn Inc. purported to make autonomous-driving software meant for material-handling vehicles. The software was available as a private beta release and had yet to secure customers for its “Enterprise Autonomy Suite.” It purportedly used artificial intelligence-based perception to steer.  

About the Offering  

Cyngn Inc. offered 3,500,000 shares of its common stock. It debuted at $ 7.50 per share. As of April 19, 2024, it trades for less than $1 and is in danger of being de-listed from the stock exchange. 

The Cyngn Inc. prospectus lists all the risks associated with the investment. A “prospectus” is the document that companies use to register their securities with the SEC. The prospectus states on page 1, “Investing in our securities is highly speculative and involves a high degree of risk.”  

Risks Associated with a Cyngn Investment  

The following risks are clearly highlighted in the prospectus. Any broker should have known about these risks before making a recommendation. The following are just a few of the risks.  

Autonomous Driving Risks 

Autonomous driving software is an emerging technology that faces significant uncertainties. The prospectus states, “There can be no assurance that these systems and supporting technologies can be developed and validated at the high-reliability standard required for deployment of autonomous industrial vehicles.”  

Limited Operating History and Untested Business Model  

Cyngn Inc. has a limited operating history and will have to “navigate an evolving and complex regulatory environment,” a challenging task even for companies with significant relevant experience.  

Risks Related to Cyngn Inc.’s Financial Position 

At the time of the offering, Cyngn Inc. had a history of losses and the prospectus states that the company expected those losses to continue for the foreseeable future.  

Product Liability  

Autonomous driving comes with significant risks for significant injuries and fatalities. The company’s insurance may not necessarily cover all of the potential accidents. Insurance premiums could increase significantly, or the company could not qualify for any type of insurance. 

Aegis Capital Corp. Underwriting   

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm. 

Kurta Law Can Help  

Our securities attorneys have experience working with investors who have lost money due to unsuitable investment recommendations. These types of cases typically go through FINRA arbitration rather than civil court – investment contracts typically include a pre-dispute investment clause requiring that investors recover losses through FINRA arbitration or mediation. FINRA arbitration is designed to be quicker and cheaper than a civil trial, but the process will be quite unfamiliar to most investors. We also offer free case evaluations and will strive to secure a fair settlement as quickly as possible.