DOJ is investigating Lordstown Motors, a inventory within the electrical automobile start-up
Signage outside the Lordstown Motors Corp. headquarters. in Lordstown, Ohio on Saturday, May 15, 2021.
Dustin Franz | Bloomberg | Getty Images
The Justice Department is investigating Lordstown Motors, as CNBC has learned, and on Friday sent shares of the competitive electric vehicle start-up by up to 17%.
The stock was momentarily paused due to volatility and lost about 10% to about $ 9.30 per share at 12:45 p.m. ET.
The DOJ’s investigation, first reported by the Wall Street Journal and confirmed to CNBC by someone with knowledge of the investigation, follows an investigation by the Securities and Exchange Commission and public comments from executives, including its former chairman and CEO Steve Burns.
A company spokesman declined to comment on the DOJ investigation, but said in a statement: “Lordstown Motors is committed to cooperating with all governmental or regulatory investigations and investigations. We look forward to closing this chapter so that our new leadership – and the entire dedicated team – focus solely on producing the first and best full-size, all-electric pickup, the Lordstown Endurance. “
The DOJ did not immediately respond to comments.
Burns and his CFO left the SPAC-backed company after an internal investigation that found “problems related to the accuracy of certain statements” regarding Lordstown’s pre-orders, specifically the seriousness of the orders and who placed them.
In May, short seller Hindenburg Research claimed the company had misled investors, including using “fake” orders to raise capital for its Endurance electric pickup truck. The short seller also said the pickup was years away from production. Lordstown has kept its plan to start manufacturing the vehicle in September.
Lordstown Motors previously said the internal investigation found that Hindenburg’s report was “fundamentally incorrect and misleading”.
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