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A Nikola Corp. investor sued the electric vehicle maker, its chairman and two executives over an 11% share price drop that followed a Sept. 10 short-seller’s report.
Arab Salem seeks to represent all other shareholders that bought Nikola stock from June 4 to Sept. 9, according to a complaint filed Wednesday in Brooklyn federal court. He accused the company and the executives of making false and misleading statements about Nikola’s operations.
The report by Hindenburg Research, a firm that owns a short position in the company’s stock and stands to gain from a decline in the share price, claimed the maker of electric and hydrogen-fuel-cell heavy-duty vehicles made non-working products appear as fully functional. The report also alleges that Nikola staged misleading videos and told “dozens of lies” about its capabilities, partnerships or products, among other issues.
Bloomberg reported Monday the U.S. Securities and Exchange Commission is looking into the allegations of fraud Hindenburg made against Nikola. The Department of Justice has also been making inquiries on the matter, the Financial Times reported Tuesday, citing people familiar with the conversations whom the newspaper didn’t name.
Nikola has pushed back on Hindenburg’s allegations that it had overstated the capabilities of some of its earliest test trucks and said Monday that the short-seller took a comment made by an employee of Robert Bosch GmbH, a supplier and investor in the company, out of context. It also said the report underestimated its ability to produce hydrogen for its fuel-cell-powered trucks.
Representatives of Nikola didn’t immediately respond to an email sent after regular business hours seeking comments on the lawsuit.
The case is Salem v. Nikola Corp., 20-cv-04354, U.S. District Court, Eastern District of New York (Brooklyn).
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