Workhorse Shares Drop Sharply After DOJ, SEC Investigations Revealed

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by Tyler Durden
Friday, Nov 05, 2021 - 03:11 PM

Shares of Workhorse dropped sharply Friday morning on news that the Securities and Exchange Commission and the Department of Justice are investigating the company.

The DOJ has "opened an investigation" into Workhorse, the Wall Street Journal reported Friday morning, citing documents. The focus of the inquiry wasn't revealed, the report says. 

The Securities and Exchange Commission is also investigating the company, the report adds. Since an initial probe by the SEC was reported in September by WSJ, the company has "notified the SEC of misstatements it had made to safety regulators".

Workhorse is the third EV company to be placed under scrutiny by the DOJ in the last 14 months, the report notes.

Those companies, Workhorse, Lordstown Motors and Nikola Corp. have all been targeted by short sellers. Workhorse was an early investor in Lordstown, the report notes. 

Recall, Nikola founder Trevor Milton was charged with three counts of fraud earlier this year. Milton was charged with making false claims regarding “nearly all aspects of the business", according to a CNBC report this summer.

Among the bolder accusations made by Hindenburg Research in their scathing report about Nikola Corporation in late 2020 was the allegation that Nikola faked its Nikola One semi truck "in motion" video, which appeared to show a functioning big rig barreling through the desert, trailer in tow. Nikola later admitted that the video was simply a truck rolling down a hill.

Lordstown was also a target of Hindenburg back in May of this year, who released a report raising questions about the validity of the company's pre-orders.