© Reuters. SEC opens lawsuit against two former Canoo (GOEV) executives
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit Friday against two former executives of EV company Canoo Inc (NASDAQ:). The regulators claim that the executives were involved in reporting failures, specifically concerning unrealistic revenue projections amounting to hundreds of millions of dollars.
According to the complaint filed in Los Angeles federal court, the SEC accused Ulrich Kranz, the former CEO of Canoo Inc., and Paul Balciunas, the former CFO, of deceiving investors about the company’s financial prospects leading up to its public merger with a special purpose acquisition company in December 2020.
Prior to the merger, Canoo had projected revenue of $120M for 2021 and $250M for 2022, based on engineering service deals with other companies. The SEC alleges that Kranz and Balciunas were aware before the merger that these projects were unlikely to generate the projected revenue.
Shares in Canoo dove 21% in March 2021 following an announcement that the electric automaker would not be able to achieve its anticipated revenue.
Additionally, the regulator accused Kranz of failing to disclose over $900,000 in compensation he received from two Canoo investors in October 2020 as an incentive to remain with the company.
In May, Canoo announced a tentative agreement to pay a $1.5M penalty to settle the case with the SEC.
Canoo is scheduled to report its second quarter results on August 14th.
Shares of GOEV are down 4.07% in afternoon trading on Friday.
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