Lordstown Motors confirms DOJ, SEC probes into SPAC merger

Lordstown Motors on July 15 acknowledged it has received two subpoenas from the SEC seeking information and documents on its special purpose acquisition company (SPAC) deal last year and its preorder numbers. The company in March disclosed the SEC had requested information regarding the preorders in response to short-seller fraud allegations.

The U.S. Attorney’s Office for the Southern District of New York is also investigating each matter.

“We have cooperated, and will continue to cooperate, with these and any other regulatory or governmental investigations and inquiries,” Lordstown Motors stated.

Lordstown Motors merged with SPAC DiamondPeak Holdings Corp. in October as a method of going public. Not long after, the company faced allegations of misleading investors regarding the production schedule of its truck, the Endurance.

Lordstown Motors maintained in its filing last week that the Endurance is scheduled to start limited production in September.

“Our future business depends in large part on our ability to execute on our plans to finance, develop, manufacture, market, and sell or lease the Endurance,” the company stated, underscoring the importance of the truck to its success. “Any delay in the financing, design, testing, manufacture, and launch of the Endurance, or in the retooling of the Lordstown Complex, could materially damage our brand, business, prospects, financial condition, and operating results.”

The SEC in particular has paid close attention to the SPAC boom that took off in 2020. Last week, the regulator fined space company Momentus $7 million and its SPAC, Stable Road Acquisition Company, $1 million for due diligence failures that occurred during their merger process.