Home Business DOJ investigating Lordstown Motors, shares of electric-vehicle start-up plunge

DOJ investigating Lordstown Motors, shares of electric-vehicle start-up plunge

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Signage outside Lordstown Motors Corp. headquarters in Lordstown, Ohio, on Saturday, May 15, 2021.

Dustin Franz | Bloomberg | Getty Images

The Justice Department is investigating Lordstown Motors, CNBC has learned, sending shares of the embattled electric-vehicle start-up plunging as much as 17% Friday.

The stock was briefly halted due to volatility and closed down 10.8% to $9.23 a share.

The DOJ inquiry, first reported by The Wall Street Journal and confirmed to CNBC by a person with knowledge of the investigation, follows a probe by the Securities and Exchange Commission into the company and public comments made by executives, including its former chairman and CEO Steve Burns.

A company spokesman declined to comment on the DOJ probe, but said in a statement, “Lordstown Motors is committed to cooperating with any regulatory or governmental investigations and inquiries. We look forward to closing this chapter so that our new leadership – and entire dedicated team – can focus solely on producing the first and best full-size all-electric pickup truck, the Lordstown Endurance.”

The DOJ did not immediately respond for comment.

Burns and his CFO exited the SPAC-backed company following an internal investigation that found “issues regarding the accuracy of certain statements” around Lordstown’s preorders, specifically the seriousness of the orders and who was making them.

In May short seller Hindenburg Research claimed the company misled investors, including using “fake” orders to raise capital for its Endurance electric pickup. The short seller also said the pickup was years away from production. Lordstown has maintained it’s on track to start making the vehicle in September.

Lordstown Motors previously said the internal investigation found Hindenburg’s report “is, in significant respects, false and misleading.” 

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