SEC sues two ex-Canoo executives over reporting failures (updated)

Canoo

04/08/2023 17:27

(Adds detail from the complaint)
    By Jody Godoy
       Aug 4 (Reuters) - The U.S. Securities and Exchange
Commission sued two former executives of electric vehicle
company Canoo Inc on Friday over what the regulator alleges were
reporting failures related to hundreds of millions of dollars of
unreasonable revenue projections.
    In the complaint filed in a California federal court, the
SEC said Ulrich Kranz, the company's former chief executive, and
Paul Balciunas, its former chief financial officer, misled
investors about the company's financial prospects before it went
public in a merger with a special purpose acquisition company in
December 2020.
        Canoo had projected revenue of $120 million in 2021 and
$250 million in 2022 based on deals to provide engineering
services to other companies. The SEC said Kranz and Balciunas
knew before the merger that the projects were unlikely to
generate revenue.
  
        The carmaker's stock plunged 21% after it announced in
March 2021 that it would not achieve the anticipated revenue,
the SEC said.
  
        The regulator also alleged that Kranz failed to disclose
more than $900,000 in compensation he received from two Canoo
investors in October 2020 to stay with the company.
  
        Neither Kranz nor Balciunas was immediately available
for comment.
  

 (Reporting by Jody Godoy; editing by Jonathan Oatis and Nick
Macfie)
 ((Jody.Godoy@thomsonreuters.com;))