Signage outside the 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 learned that the shares of the competitive electric vehicle start-up fell as much as 17% on Friday.
The stock was momentarily paused due to volatility and fell about 10% to about $ 9.30 per share at 12:45 p.m. ET.
The DOJ investigation, first reported by The Wall Street Journal and CNBC was confirmed by someone with knowledge of the investigation, following an investigation into the company by the Securities and Exchange Commission and public comments from senior executives, including its former chairman and CEO Steve Burns.
A company spokesman declined to comment on the DOJ investigation, but said in a statement: “Lordstown Motors is committed to cooperating with all governmental or regulatory investigations and investigations. We look forward to closing this chapter so that our new leadership – and the entire dedicated team – can focus solely on producing the first and best full-size, all-electric pickup, the Lordstown Endurance. “
The DOJ did not immediately respond to comments.
Burns and his CFO has left the company supported by SPAC according to an internal investigation that found “problems with the accuracy of certain statements” regarding Lordstown’s pre-orders, specifically the seriousness of the orders and who made them.
In May, short seller Hindenburg Research claimed the company misled investors, including Use “fake” orders to raise capital for his Endurance electric pickup. 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 Motors previously said the internal investigation found that Hindenburg’s report was “fundamentally incorrect and misleading”.