Business & Investment

Lordstown Motors withdraws Justice Probe report

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Lordstown Motors Corporation slipped after the Wall Street Journal reported that a problematic electric car startup was being investigated by the US Department of Justice.

The investigation is being processed by the US federal prosecutor’s office in Manhattan and is in its infancy, the newspaper said.

“Lordstown Motors is committed to cooperating with regulatory and government investigations and inquiries,” company spokesman Ryan Hallett said in an email. “I’m looking forward to closing this chapter.”

A spokesman for Federal Attorney Audrey Strauss in Manhattan declined to comment on Bloomberg News.

Lordstown, which acquired the abolished General Motors plant in Ohio in 2019, is set to begin production of electric pickup trucks by September. In November, the company brought a $ 675 million profit to Lordstown through a merger with special-purpose acquisition company Diamond Peak Holdings.

The startup has been hit by a series of accidents in recent months and has been scrutinized by regulators. In March, Lordstown said it had received an inquiry from the Securities and Exchange Commission regarding its operation.

The demand for the company’s trucks is at the heart of the company’s problems. The company’s founder and chief executive officer, Steve Burns, was dismissed last month after the board determined that the board was exaggerating interest in endurance trucks, claiming the company had received 100,000 pre-orders. Was done.

The board’s investigation followed a March report by short-selling Hindenberg Research, who called the pre-order “fictitious.”

A board investigation found that management inaccurately pre-ordered from a commercial fleet, not from a third-party management company or “influencer” who did not plan to buy the truck directly. I quoted the case that I claimed.

Lordstown is one of a number of electric vehicle startups exposed through a merger with a special purpose company. The so-called reverse merger has been criticized for creating public companies from young ventures that have few ways of making money or commercially viable products.

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Lordstown Motors withdraws Justice Probe report Lordstown Motors withdraws Justice Probe report

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