US Justice Department Begins Probe of Ohio’s Lordstown Motors

The burned out shell of the Endurance prototype

Lordstown” Motor Corp (LMC) purchased the 785 acre GM plant in 2019 hoping to build the boxy, styleless all-electric Endurance pickups at the plant. The GM plant once employed over 13,000. 

“Don’t move. Don’t sell your house” – Trump at a 2017 Youngstown rally.

The investigation is being handled by the U.S. attorney’s office in Manhattan and is in early stages. The Securities and Exchange Commission is also investigating. 

Five Lordstown executives conducted a series of stock sales in early February that led outside accountants and securities lawyers to question the company’s internal controls over its executives’ trading. Those sales preceded the company’s sharing financial results from its first quarter as a publicly traded company with the market, results that underperformed analysts’ expectations. The company said a special committee of its board of directors found the trades were unrelated to the company’s performance.

At about the same time the the Lordstown executives were selling their stock, a share of the stock (RIDE) was selling for $31.80. Friday the stock closed at $9.23.

The criminal probe is the latest challenge for the Ohio-based vehicle maker, which has been racked with months of bad news as it approaches a September target to start limited production of a full-size electric pickup truck called the Endurance.

◾️The beginning of a series of challenges for Lordstown Motors started on January 13, 2021 when the prototype of the Endurance pickup ominously caught fire and was totally destroyed in it’s first ten minutes of operation.

◾️The big hit to Lordstown Motors came on March 12, when Hindenburg Research reported that the 100,000 preorders for the Endurance pickup were “fake orders”. They called Lordstown CEO Steve Burns a “con man” and said the pickup project could be years behind schedule. They said LMC is a mirage that misled investors “on both its demand and production capabilities.”

◾️March 17, the Securities and Exchange Commission asked Lordstown Motors for information about allegations that the company misled investors.

◾️On March 18 the first of at least 5 investors filed a lawsuit against Lordstown motors claiming the company defrauded them.

◾️The Endurance pickup was entered in the San Felipe 250 Race in Baja California on April 17. It completed less than 40 miles of the 280-mile race before having to withdraw and cry no mas.

◾️April 27, it’s reported Lordstown Motors Corp. missed it’s real estate property tax payment in the first half of 2020. CEO Burns claims it was an error.

◾️May 16, Investors accuse Lordstown Motors’ corporate officers of insider trading.

◾️May 19, Ford unveiled the 2022 F-150 Lightning, an all-electric pickup truck. It will sell for $39,974 before tax incentives. Pricing for the Endurance starts at $52,500, RIDE stock price falls.

◾️May 28, 2021, the company receives a notice of delinquency for a late NASDAQ filing. CEO Burns claims it was an error.

◾️June 8, 2021 Lordstown Motors (NASDAQ: RIDE) on Tuesday warned that it does not have enough cash to begin commercial production of its electric vehicle (EV), raising doubts about whether the company will be able to survive.

◾️June 13, Founder and CEO, Steve Burns, and CFO Julio Rodriguez resign.

◾️June 15, Lordstown Motors’ President Rich Schmidt said the company had enough “basically binding” preorders for a year of production.

◾️June 17, the company issued a “clarification” that none of its reservations were binding.

◾️July 2, U.S. Justice Department begins investigation of Lordstown Motors.

The “Lordstown” plant is located about 20 miles from Youngstow, NW route.

The Wall Street Journal, The Youngstown Vindicator and News Views

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