The Department of Justice is now investigating Lordstown Motors


The Department of Justice has launched an investigation into the problematic start – up of electric vehicles from Lordstown Motors, which is supported by General Motors and announced late last year, but which has not yet been picked up for endurance production. Wall Street Journal. It’s another official exam on startup, like the Securities and Exchange Commission began research earlier this year To the misleading claims of Lordstown Motors executives about how many Advance Orders it had logged for sustainability.

A new investigation, led by a U.S. law firm in southern New York, will begin just weeks after Lordstown Motors The CEO and founder were pushed out following the law firm’s challenge to misleading allegations. At that time, the CFO of the startup as well as other directors and personnel close to the founder were also fired.

“Lordstown Motors is committed to collaborating with regulatory or government investigations and inquiries,” a startup spokesman said in a statement. “We look forward to concluding this chapter so that our new leader and our entire dedicated team can focus exclusively on making the first and best full-size all-electric car, Lordstown Endurance.”

It is unclear what the Department of Justice is investigating, although SDNY often focuses on financial crimes and allegations of fraud. The DOJ is also investigating the start-up of electric trucks by Nikola, and the SEC has opened probe for other EV boot Canoo. The SDNY press office did not respond immediately to the request for comment.

Founder Steve Burns started Lordstown Motors in 2019 after leaving the previous launch, another electric car company called Workhorse. He mainly founded Lordstown Motors to buy the recently closed plant in Lordstown, Ohio, where GM once built the Chevy Cruze. GM also took a stake in the company.

The purchase – and the launch itself – was praised by the Trump administration. Then President Donald Trump said Lordstown Motors by buying the plant was for the state “BIG NEWS,” and was later presented at the White House event. Former Vice President Mike Pence even appeared Sustainability Disclosure Event in June 2020.

The acquisition of the GM plant was to give Lordstown Motors an advantage over other startups that are building their own plants. Burns also found one in the truck when he licensed intellectual property rights to an electronic pickup that Workhorse had developed but never produced for production – a million-dollar contract for his former company.

In 2020, Lordstown Motors had one number of starts of electric vehicles which was made public a merger into a special purpose vehicle, a process that helped it raise $ 675 million. Afterwards, Burns and the company mentioned that they had posted about 100,000 pre-orders to Endurys in late 2020 and early 2021.

But in March, short-sold research firm Hindenburg Research published a report which accused Lordstown Motors, inter alia, of falsifying some of those pre – orders and procuring some of them from dealers who could not afford the number of vehicles to be purchased. Burns initially pushed back, saying “there are always haters” and quoting Taylor Swift’s “Shake it Off” to a local news station. Soon after that, the company revealed the SEC probe and launched their own review.

In May, Lordstown Motors admitted it needed more money to survive and reduced the number of vehicles it hopes to produce by the end of 2021. It has also stopped its second vehicle, electric car, and said it will have sufficient funds only until May 2022.

The review by a law firm affiliated with Lordstown Motors was completed in June. It confirmed that Burns and others had made misleading claims about pre – orders, and he resigned as a result.

Lordstown Motors has since leveraged another former Workhorse Director, Angela Strand, to serve as interim CEO. He is paid $ 100,000 a month for a role when a company is looking for a permanent replacement, according to a recent application.

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