Business
SEC has issued a subpoena to bankrupt carmaker Fisker, indicating possible probe
Fisker Inc. has received a subpoena from the Securities and Exchange Commission, indicating the bankrupt Southern California electric vehicle maker could be under investigation by Wall Street’s top cop, according to a court filing.
SEC subpoenas, which typically seek either records or testimony, are confidential, but a mention of the agency’s demand for information was included in a U.S. Bankruptcy Court filing this week in Delaware, where the troubled automaker filed for Chapter 11 protection on June 18 under a heavy debt load. The subpoena was included in a list of ongoing legal proceedings against Fisker; the filing did not provide any details about why the agency issued the subpoena.
As the company’s stock price has plummeted, shareholders have experienced large stock losses. Fisker is a defendant in a pending shareholder class-action lawsuit and five shareholder derivative complaints regarding a sharp drop in its stock price last fall. Derivative suits are filed by shareholders on behalf of the company and typically accuse officers or directors of wrongdoing.
Shaneeda Jaffer, a white-collar defense attorney at Benesch in San Francisco, said that although it’s an “absolute possibility” that Fisker is the target of an investigation, the agency also issues subpoenas to parties that might be able to provide information about other probes.
“Or you could be a subject of an investigation where you haven’t necessarily been put in either of those buckets. Companies and individuals receive subpoenas from the SEC all the time,” she said.
If wrongdoing is found, SEC investigations can lead to civil allegations or referrals to the Department of Justice for potential criminal investigation and possible charges.
A spokesperson for the agency said it does not comment on whether it is conducting an investigation. Fisker also declined to comment.
Fisker, based in Manhattan Beach until it moved to Orange County earlier this year, was founded in 2016 by auto designer Henrik Fisker. It went public in 2020 amid a surge of investor interest in electric vehicles, raising about $1 billion in capital, and was valued at close to $8 billion a year later.
Fisker’s stock reached an all-time high of $31.96 in March 2021 before dropping below $10 the next year and falling off a cliff late last year to under $2 a share. It now trades for less than a penny.
Last year, it released its first model, an SUV called the Ocean that was intended to compete with Tesla’s Model Y. But it had trouble meeting production goals at its contract manufacturer in Austria and delivering the vehicles to customers. The car also was plagued by software glitches. The company was reportedly in talks this year with Nissan to build a pickup truck domestically but failed to reach an agreement.
The lawsuits similarly allege that Henrik Fisker, the company’s chairman and chief executive; his wife, Geeta Gupta-Fisker, the company’s co-founder and chief financial and operating officer; and others, including board members, violated their fiduciary duties and/or securities laws. The company declined comment.
The allegations generally stem from a series of events that began with a news release issued in August 2023 that stated Fisker would produce up to 23,000 Oceans that year. However, it disclosed in November that in the third quarter it had built only 4,725 of the vehicles, with 1,097 delivered to customers.
The company also announced in November that its third-quarter results would be delayed due to the departure of its chief accounting officer, whose replacement resigned within days. When it released the results, Fisker said it had to make “material adjustments” to its financials and had identified a “material weakness in internal controls.” The company’s share price fell that month by more than half, to less than $2.
James Lucas, 52, a Fisker shareholder who said he lost more than $100,000 investing in the company, said shareholders also are angry over a series of media appearances by Henrik Fisker during which he touted the company’s prospects, even as its fortunes declined.
“There were a lot of comments made by mostly Henrik Fisker that had these kind of broad visions about the number of vehicles that were going to be produced. Whether it was just a failure to execute, who knows,” said the L.A. County resident. “As an investor you take senior managers’ word on a lot of things.”
Lucas, who participates in a Telegram group of Fisker investors, said he has filed complaints with the SEC against Fisker citing multiple issues and believes other aggrieved investors also have done so.
In March 2023, before the company had released the Ocean, Fisker boasted on CNBC that the automaker would make money on the first cars it shipped because its vehicle was being built by its contract manufacturer. “I can just sit counting the cash,” he said during the interview, which included a projection that Fisker would sell 1 million cars in 2027.
One year later on March 1, Fisker told an interviewer on Bloomberg TV that the company would “conservatively” deliver 20,000 to 22,000 to a new dealer network it had decided to put together. “In fact, we have a few dealers telling us, are you sure you can deliver us enough cars because we think we can sell more cars than what you’re offering us right now,” he said.
That same day, he told Yahoo Finance that he was confident the share price would rise above $1 a share to avoid being delisted from the New York Stock Exchange. “I feel very optimistic about our future,” he said. The shares were delisted the next month.
Fisker produced only somewhat more than 10,000 vehicles before it filed for bankruptcy.
With the stock now trading for less than a penny in bankruptcy, Henrik Fisker has suffered big losses too, with his stake in the company worth little to nothing. But he also sold about $20 million worth of stock in 2021 well before the steep decline.
The company said that Henrik Fisker was not speaking to the media.
Andrew Fiorella, a securities litigator in Cleveland also at Benesch, said it was highly unlikely Fisker shareholders would be able to recover their losses, given that secured debt holders and others with claims against the bankrupt company have priority over common shareholders.
“There’s almost certainly going to be nothing left at the end of the day,” he said.
Fisker is not the only California startup electric vehicle maker that has experienced troubles amid a sales slowdown that is at least partially attributable to a rise in interest rates that has made financing more costly.
Rivian in Irvine and Lucid in the Bay Area, which both went public in 2021, also have seen sharp price declines as the hype over EVs has faded. However, each company has deep-pocketed institutional investors, and both are still operating.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
Times Insider explains who we are and what we do, and delivers behind-the-scenes insights into how our journalism comes together.
Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
-
Finance1 minute agoRising gas prices put more financial pressure on Latino households, study says
-
Fitness7 minutes ago
Jane Fonda was in her 40s when she changed the way we exercise
-
Movie Reviews19 minutes agoMovie Review: The Mortuary Assistant – HorrorFuel.com: Reviews, Ratings and Where to Watch the Best Horror Movies & TV Shows
-
World31 minutes ago
Meta slashes 8,000 jobs, or 10% of its workforce, as Microsoft offers buyouts
-
News37 minutes agoTrump Says Israel and Lebanon Agree to Extend Cease-Fire by Three Weeks
-
Politics43 minutes agoTrump Reposts Anti-Immigrant Tirade Calling China and India ‘Hellhole’ Places
-
Business49 minutes agoNike to Cut 1,400 Jobs as Part of Its Turnaround Plan
-
Science55 minutes agoNew Gene Therapy Enables Children With a Rare Form of Deafness to Hear