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Lordstown Motors Says It's Being Investigated by SEC, U.S. Attorney

Lordstown said it has received two subpoenas from the SEC relating to its SPAC merger with DiamondPeak and its pre-orders.
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Lordstown Motors  (RIDE) - Get Report shares fell Friday, after the electric truck maker said in an Securities and Exchange Commission filing that it’s the subject of an investigation by the agency.

“We have received two subpoenas from the SEC for the production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles,” the company said in the filing.

“And we have been informed by the U.S. Attorney’s Office for the Southern District of New York that it is investigating these matters. We have cooperated, and will continue to cooperate, with these and any other regulatory or governmental investigations.”

The filing confirmed reports that the government was looking into the matters.

The merger with DiamondPeak was a SPAC transaction that led to a public listing for Lordstown in October. 

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Short-seller Hindenburg Research has claimed that pre-orders were overstated.

Lordstown stock recently traded at $8.67, down 2%. It has slumped 64% in the past six months amid the tumult surrounding it.

Last month Lordstown Founder and Chief Executive Steve Burns left the company after an independent investigation into allegations made by Hindenburg, including a claim that the company is a "mirage."

Hindenburg said in March that Lordstown is an "electric vehicle SPAC with no revenue and no sellable product" that had "misled investors on both its demand and production capabilities."

Also in June, SEC filings showed that five of Lordstown’s top executives sold more than $8 million of stock in February. The executives who sold shares include Lordstown President Rich Schmidt and former Chief Financial Officer Julio Rodriguez. 

SPACs, formally known as special-purpose-acquisition companies or blank-check companies, are created for the express purpose of finding and merging with operating partners. The idea is to speed an operating company to the public markets and avoid the extended process of a traditional initial public offering.