The US Securities and Exchange Commission (SEC) has imposed a 1.5 million-dollar fine on the Californian EV startup Canoo for allegedly misleading investors in connection with its IPO. There are also personal consequences for the then CEO Ulrich Kranz.
According to its investigation, the SEC believes Canoo deceived investors with unrealistic revenue forecasts of hundreds of millions of dollars before it went public in 2020 as part of a merger with a special purpose acquisition company.
Canoo projected revenues of 120 million dollars for 2021 and 250 million dollars for 2022 in connection with providing engineering services to other companies. According to the SEC, these projections were unreasonable – and then CEO Ulrich Kranz and then CFO Paul Balciunas must have been well aware of that, since two of the projects that accounted for nearly all of its projected revenues were no longer active or viable.
Kranz, who is considered the father of the BMW i3 and who moved from Canoo to Apple in 2021, must pay a 125,000 dollar fine and is barred from working as an officer or director of a listed company for three years. Balciunas will have to pay 50,000 and return 7,500 dollars in profits. He also agreed to a two-year bar.
Kranz’s penalty is not higher because of his former position at Canoo but because the SEC alleges that he failed to report money he received from investors to stay with the company. “The complaint further alleges that in November 2019, Kranz entered into an agreement with two individuals who were significant investors in Canoo to receive up to 1 million dollars in compensation related to his work at Canoo, and in October 2020, Kranz received over 900,000 dollars from these two individuals,” the SEC writes.
It is currently unclear what the ban means for his position at Apple.