A New York law firm specializing in recovering damages for investors claiming to be victims of securities fraud and consumers poorly treated by manufacturers has announced an investigation into bankrupt Lion Electric over concerns the Canadian-based company committed federal securities fraud in the U.S.
The law firm, Bronstein, Gewirtz, & Grossman, LLC., appears to be specifically investigating Lion's battery-electric school buses of which several have experienced technical issues, rendering them useless and possible safety hazards.
Lion officially filed for bankruptcy protection late last year in both the U.S. and Canada.
[Related: Lion Electric files for bankruptcy]
The investigation is centered on the February 17, 2025 report from the Kennebec Journal, a daily newspaper based in Augusta, Maine, titled: "EPA visits Winthrop schools as part of electric bus investigation."
The article revealed the following:
“Federal agents visited Winthrop schools in late January as part of an investigation into Lion Electric Co.’s electric buses, interim Superintendent Becky Foley told the school board earlier this month.” The superintendent told the school board that, 'I met with an EPA special agent last week to see if there was any fraud committed by Lion. I think whatever resolution may occur will take some time, and I will keep the board posted.' Following this news, Lion Electric stock dropped.'
[Related: Lion Electric receives creditor extension amid EPA investigation]
The reason for the agents' visit stems from technical problems, such as loss of power steering, the buses experienced almost immediately after entering service in late 2023. This serious safety concern forced the district to remove the buses from service and replace them with older diesel-powered buses until they're repaired.
The problem, however, is that Lion has failed to repair a single bus, claiming it lacks the manpower after a series of layoffs.
A total of 30 Maine school districts purchased 72 electric buses via the EPA's incentive program under the Biden administration. Nine of the districts bought Lion's zero-emission buses to replace aging diesel-powered buses. A former Lion technician reportedly warned federal and state officials about safety issues, claiming the buses are "more like a science project than a validated, road-legal vehicle."
This wasn't the most serious incident.
In Ontario, Canada last January, a Lion school bus carrying students to school caught on fire. The driver fortunately pulled off the road and evacuated the vehicle due to an unknown malfunction before the fire started. The cause of the malfunction leading to the fire remains under investigation.
[Related: Lion Electric EV school bus catches fire on way to school]
The firm is now requesting more information from investors who have purchased Lion Electric securities and/or can provide additional facts relating to the investigation.
Meanwhile, Lion continues to search for potential investors and has received a creditor extension in Canada until April 4.
The company did not reply following a request for comment.
