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EV Startup Workhorse Stock Slumps on Report of DOJ Investigation

Workhorse shares traded lower after a report said the Department of Justice had opened an investigation into the electric-van maker.

Shares of Workhorse  (WKHS) - Get Workhorse Group Inc. Report fell on Friday after the U.S. Justice Department reportedly opened an investigation into the electric-van startup.

The Wall Street Journal on Friday reported that the U.S. attorney’s office in Manhattan is conducting an investigation into the EV startup, citing documents reviewed by the newspaper.

The exact nature of this investigation and further details into the probe were not available in the documents, the Journal reported.

To be sure, the U.S. Attorney’s office for the Southern District of New York prosecutes cases involving white-collar and cyber crime, mortgage fraud, public corruption among other areas of criminal law enforcement.

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Shares of the Cincinnati company at last check fell 9.5% to $6.54.

The Journal in September also reported that the U.S. Securities and Exchange Commission was looking into Workhorse.

Since late July, Workhorse has appointed new executive leadership, withdrawn financial guidance, stopped production and recalled vans that already had been delivered to customers, the Journal reported.

In February, the maker of commercial electric delivery vehicles lost a 10-year contract bid to build the next-generation mail truck for the U.S. Postal Service. The contract, reportedly valued at $6 billion, was awarded to Oshkosh Defense.  (OSK) - Get Oshkosh Corp Report

Shares of rival Nikola  (NKLA) - Get Nikola Corporation Report also came under pressure Friday, a day after the electric-truck maker said it could settle fraud charges levied by the SEC for around $125 million.