CLEVELAND – A shareholder case was filed on Thursday against a start-up company for electric trucks that claims to have deceived investors by making false claims about the number of predetermined trucks and the progress it has made with production in a former General Motors car. plant in Ohio.
The lawsuit filed by shareholder Chris Rico against Lordstown Motors Corp in federal court in Youngstown seeks certification as a class action lawsuit.
Lordstown Motors RIDE,
CEO Steve Burns has admitted that the US Securities and Exchange Commission is conducting an investigation based on a comprehensive and critical report released last week by investment firm Hindenburg Research, which holds a short position on Lordstown shares Motors.
Read: Lordstown’s losses are growing due to dispute over short sellers, and the company reveals the SEC investigation
Burns, who spoke during the company’s first earnings call on Wednesday, said the board of directors had convened a special committee to investigate the issues surrounding the SEC investigation.
A company spokesman did not respond to a request for comment on Thursday.
The complaint is largely based on the Hindenburg research report which states that Lordstown Motors ‘has no revenue and no salable product’ and ‘misled investors as to its demand and production capacity.’
According to the report and lawsuit, the production is gone for three to four years, according to a former employee. Burns said production will begin in September.
The company claimed to have pre-sold 100,000 trucks to various fleets in the US. According to the lawsuit, however, the orders are not binding.
According to the lawsuit, investors, business partners and former employees are, according to documents, “the company’s orders are largely fictitious and used as a prop to raise capital and give legitimacy.”
According to the Hindenburg report, a recent $ 735 million announcement for 14,000 trucks was made to a suspected buyer who does not operate a vehicle fleet and is based in a small apartment building in Texas.
The company received unwelcome publicity in January when a prototype vehicle caught fire ten minutes into its initial test drive.