Lordstown Motors confirms DOJ investigation into SPAC deal and pre-orders
Workers install door hinges on the body of a prototype endurance electric pickup truck at the Lordstown Motors assembly plant in Ohio on June 21, 2021.
Michael Wayland / CNBC
Competitive electric vehicle startup Lordstown Motors has confirmed that the Justice Department is investigating its deal, including the SPAC deal that took the company public last year and its coverage of vehicle pre-orders.
Confirmation comes two weeks after the federal investigation was first reported by the Wall Street Journal and confirmed to CNBC by someone with knowledge of the investigation. It follows an investigation into the company by the Securities and Exchange Commission and public comments from executives, including former chairman and CEO Steve Burns.
Lordstown Motors said in a filing on Thursday that it has “received two subpoenas from the SEC for drafting documents and information, including regarding the DiamondPeak-Legacy Lordstown merger and vehicle pre-orders, and we have been notified by the US New York District Attorney’s Office for investigation into these matters. “
The company said it has “cooperated and will continue to do so in this and all other governmental or regulatory investigations and investigations.”
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 alleged the company 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 previously said the internal investigation found that Hindenburg’s report was “fundamentally incorrect and misleading”.
Lordstown went public in October through a special acquisition company (SPAC). It is among a growing group of electric vehicle startups going public through deals with SPACs, which have become a popular way of raising money on Wall Street due to their leaner regulatory process than traditional IPOs.
Correction: The DOJ investigation was first reported two weeks ago. In an earlier version, this point in time was specified incorrectly.