Workhorse Inc (NASDAQ: WKHS), the electric van maker that has run into serious scrutiny as of late, is the subject of yet another investigation— this time by the Department of Justice.
According to documents seen by the Wall Street Journal, the Justice Department has opened a probe into Workhorse, which will be conducted by the US attorney’s office in Manhattan. Although details of the investigation remain unclear as both the EV maker and a spokesperson for the attorney’s office failed to comment, the latest shake-up comes just after the company made changes to its senior management.
To further add to Workhorse’s headache, the SEC is also concurrently probing the automaker over alleged misstatements it made to safety regulators. The company has since announced it has provided the regulatory agency with the requested records, but stopped short of revealing which documents, exactly, the SEC was seeking.
Shares of Workhorse were sent plummeting further on Friday, closing more than 80% below its record-high to $41.34 in February. The company has thus far cancelled its financial guidance, halted production and recalled some of vehicles, and even seen its CFO and COO depart all before the beginning of October.
Workhorse marks the third EV maker that has fallen under significant scrutiny by financial regulators and federal investigators, after eager investors poured billions of dollars into the EV space during the pandemic. Many EV startups were able to fast-track their public debut via special-purpose-acquisition companies, or SPACs, which became the craze that gripped Wall Street all throughout last year.
This past summer, both the DOJ and the SEC laid financial fraud charges against former founder of Nikola Corp Trevor Milton, with the company currently in the midst of shoring up $125 million towards a settlement with the securities regulator. Similarly, the Justice Department and the SEC also opened investigations into Lordstown Motors, after shortseller Hindenberg Research revealed the company had made inaccurate claims about its preorders.
Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.