Lordstown Motors confirms DOJ probe into SPAC deal and pre-orders

Personnel set up doorway hinges to the entire body shell of a prototype Endurance electric pickup truck on June 21, 2021 at Lordstown Motors’ assembly plant in Ohio.

Michael Wayland / CNBC

Embattled electric powered automobile commence-up Lordstown Motors has verified the Justice Section is investigating its organization, which includes the SPAC deal that brought the company public very last 12 months and its reporting of motor vehicle preorders.

The confirmation will come a week soon after the federal inquiry was first reported by The Wall Street Journal and verified to CNBC by a individual with awareness of the investigation. It follows a probe by the Securities and Exchange Commission into the business and public reviews made by executives, such as its previous chairman and CEO Steve Burns.

Lordstown Motors explained in a filing Thursday that it has “been given two subpoenas from the SEC for the creation of paperwork and information, such as relating to the Merger among DiamondPeak and Legacy Lordstown and pre-orders of automobiles, and we have been educated by the U.S. Attorney’s Business for the Southern District of New York that it is investigating these matters.”

The organization mentioned it has “cooperated, and will carry on to cooperate, with these and any other regulatory or governmental investigations and inquiries.”

Burns and his CFO exited the SPAC-backed company following an internal investigation that discovered “problems relating to the accuracy of specified statements” around Lordstown’s preorders, precisely the seriousness of the orders and who was making them.

In May, brief seller Hindenburg Investigate claimed the firm misled traders, including using “bogus” orders to increase capital for its Endurance electrical pickup. The limited vendor also explained the pickup was several years absent from production. Lordstown has taken care of it can be on keep track of to start out making the car or truck in September.

Lordstown earlier stated the internal investigation observed Hindenburg’s report “is, in sizeable respects, wrong and misleading.” 

Lordstown went public through a exclusive objective acquisition company, or SPAC, in Oct. It is amid a developing group of electrical auto start off-ups heading general public by way of offers with SPACs, which have become a preferred way of elevating money on Wall Street due to the fact they have a a lot more streamlined regulatory process than regular initial general public offerings.