Photo: Fisker
EV startups had it rough in 2024, as EV sales peaked and interest in exotic electric vehicles dropped. Fisker, the company that sold the failed Ocean SUV, was hit hard and forced to file for bankruptcy. The company has already started liquidating its assets, stirring the hornet nest at the SEC. The Commission has begun an investigation that could turn nasty.
Henrik Fisker might be either the worst or the unluckiest entrepreneur in history, having started two startups and crashing them both into the ground. Although he may try to blame his failures on economic conditions and people losing interest in electric vehicles, the hard truth is that the Ocean SUV was a pile of crap. Ocean owners complained about mechanical and software failures, making everyone run away. No wonder the sales plummeted.
With outstanding debt to pay and cash reserves burning quickly, Fisker had no choice but to file for bankruptcy protection under Chapter 11. Many companies use this form of protection to reorganize and start fresh, but for Fisker, this is only a preliminary step toward Chapter 7 (liquidation). The company has already begun liquidating inventory at rock-bottom prices and will ask a US bankruptcy judge to approve its liquidation plan at an October 9 court hearing in Wilmington, Delaware.
However, the EV startups' ballistic trajectory attracted unwanted attention from the SEC inspectors, which opened an investigation into Fisker's liquidation plans. The SEC has reportedly sent multiple subpoenas to the bankrupt EV maker but has yet to receive any response. The Commission's main concern is the lack of clarity on how and whether Fisker intends to preserve its corporate records after adopting a settlement plan. Failing to do so would obviously hinder the SEC's ability to conduct its investigations.
The SEC confirmed in a filing (attached below) that it has "outstanding investigative subpoenas and may have the need to request or subpoena additional documents in the future relating to its ongoing investigation." However, the Commission does not offer specific details, only that the investigation could result in "future actions alleging violations of the federal securities laws."
The document wording suggests that there may be more to this than preserving corporate records. The SEC needs Fisker's books and records because it has "an ongoing police and regulatory interest" in them. And they should, considering the many controversial decisions Henrik Fisker made. Among them was naming his wife, Geeta, as the company's CFO and his daughter, Natasha, as the marketing director.
Henrik Fisker might see the liquidation agreement he reached with the company's creditors as his getaway ticket, but this doesn't mean the SEC will let him. I'm sure this is a textbook case and will be used as an example. Henrik Fisker might have calmed down creditors, but it must still appease investors. Even as the company was going under, Fisker reassured investors that the company was fine and had big plans to launch new vehicle models into several different segments.
With outstanding debt to pay and cash reserves burning quickly, Fisker had no choice but to file for bankruptcy protection under Chapter 11. Many companies use this form of protection to reorganize and start fresh, but for Fisker, this is only a preliminary step toward Chapter 7 (liquidation). The company has already begun liquidating inventory at rock-bottom prices and will ask a US bankruptcy judge to approve its liquidation plan at an October 9 court hearing in Wilmington, Delaware.
However, the EV startups' ballistic trajectory attracted unwanted attention from the SEC inspectors, which opened an investigation into Fisker's liquidation plans. The SEC has reportedly sent multiple subpoenas to the bankrupt EV maker but has yet to receive any response. The Commission's main concern is the lack of clarity on how and whether Fisker intends to preserve its corporate records after adopting a settlement plan. Failing to do so would obviously hinder the SEC's ability to conduct its investigations.
The SEC confirmed in a filing (attached below) that it has "outstanding investigative subpoenas and may have the need to request or subpoena additional documents in the future relating to its ongoing investigation." However, the Commission does not offer specific details, only that the investigation could result in "future actions alleging violations of the federal securities laws."
The document wording suggests that there may be more to this than preserving corporate records. The SEC needs Fisker's books and records because it has "an ongoing police and regulatory interest" in them. And they should, considering the many controversial decisions Henrik Fisker made. Among them was naming his wife, Geeta, as the company's CFO and his daughter, Natasha, as the marketing director.
Henrik Fisker might see the liquidation agreement he reached with the company's creditors as his getaway ticket, but this doesn't mean the SEC will let him. I'm sure this is a textbook case and will be used as an example. Henrik Fisker might have calmed down creditors, but it must still appease investors. Even as the company was going under, Fisker reassured investors that the company was fine and had big plans to launch new vehicle models into several different segments.
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