First it was Nikola, now it is Lordstown Motors. Last week, the SEC charged EV manufacturer Lordstown Motors Corp. with misleading investors about the sales prospects of the company’s electric pickup truck. According to the SEC’s announcement:
“’We allege that, in a highly competitive race to deliver the first mass-produced electric pickup truck to the U.S. market, Lordstown oversold true demand for the Endurance,’ said Mark Cave, Associate Director of the Division of Enforcement. ‘Exaggerations that misrepresent a public company’s competitive advantages distort the capital markets and foil investors’ ability to make informed decisions about where to put their money.’ The order finds that Lordstown violated certain antifraud, proxy, and reporting provisions of the federal securities laws.”
The company agreed to a cease-and-desist order and disgorgement of $25.5 million. Granted, the nature of Nikola’s fraudulent statements and those alleged against Lordstown are somewhat different: Nikola’s were linked to product sustainability attributes and Lordstown’s to product pre-sales and its inability to access critical parts. One complicating factor: Lordstown filed for bankruptcy last year, so the SEC’s enforcement action must still go through the bankruptcy court for final disposition.
But wait – there’s more… See the next blog.
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Photo credit: Robert – stock.adobe.com
