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

The Justice Division is investigating Lordstown Motors, CNBC has discovered, sending shares of the embattled electric-vehicle start-up plunging as a lot as 17% Friday.

The inventory was briefly halted resulting from volatility and was down about 10% to roughly $9.30 a share as of 12:45 ET.

The DOJ inquiry, first reported by The Wall Road Journal and confirmed to CNBC by an individual with information of the investigation, follows a probe by the Securities and Trade Fee into the corporate and public feedback made by executives, together with its former chairman and CEO Steve Burns.

An organization spokesman declined to touch upon the DOJ probe, however mentioned in a press release, “Lordstown Motors is dedicated to cooperating with any regulatory or governmental investigations and inquiries. We stay up for closing this chapter in order that our new management – and full devoted group – can focus solely on producing the primary and greatest full-size all-electric pickup truck, the Lordstown Endurance.”

The DOJ didn’t instantly reply for remark.

Burns and his CFO exited the SPAC-backed firm following an inner investigation that discovered “points concerning the accuracy of sure statements” round Lordstown’s preorders, particularly the seriousness of the orders and who was making them.

In Might brief vendor Hindenburg Analysis claimed the corporate misled traders, together with utilizing “faux” orders to lift capital for its Endurance electrical pickup. The brief vendor additionally mentioned the pickup was years away from manufacturing. Lordstown has maintained it is on monitor to start out making the car in September.

Lordstown Motors beforehand mentioned the interior investigation discovered Hindenburg’s report “is, in important respects, false and deceptive.”