USA Rare Earth (USAR) Loses 8.82% as Lawmaker Questions Lutnick Conflict of Interest

USA Rare Earth Inc. (NASDAQ:USAR) is one of the 10 Stock Market Casualties You Can’t Ignore Today.

USA Rare Earth fell for a third straight session on Friday, shedding 8.82 percent to close at $16.24 apiece, as investors unloaded portfolios amid brewing tensions in the House of Representatives in relation to the government’s $1.58 billion investment into the listed firm.

In a 10-page letter on Thursday, Representative Zoe Lofgren accused Commerce Secretary Howard Lutnick of structuring the government’s investment into USA Rare Earth Inc. (NASDAQ:USAR), saying that even if the government decides not to pursue a stake in the company, the listed firm would remain reliant on a billion-dollar PIPE financing from Cantor Fitzgerald, which his family currently owns.

USA Rare Earth Inc. (NASDAQ:USAR) announced in January this year that it secured $3.1 billion worth of financing commitments from both the government and the private sector, $1.5 billion of which came from PIPE financing.

USA Rare Earth (USAR) Loses 8.82% as Lawmaker Questions Lutnick Conflict of Interest

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While the secretary has already divested his entire ownership in Cantor Fitzgerald upon joining the Cabinet, it is still being run by his sons.

“This deal creates a massive personal conflict by granting the Secretary of Commerce overwhelming leverage to influence the behavior of a private company while positioning him to promote the interests of his sons as a condition of his support,” Lofgren said.

Both USA Rare Earth Inc. (NASDAQ:USAR) and the Commerce Department have yet to release a comment regarding the issue.

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