Ulrich Kranz, the Apple car executive who served as the former CEO of the EV startup Canoo, is facing some legal trouble. On Friday, the Securities and Exchange Commission filed a lawsuit against Kranz and former Canoo chief financial officer Paul Balciunas over claims they provided “unreasonable revenue projections” to investors, as first reported by Bloomberg.
As outlined in the lawsuit, the SEC states that Kranz and Balciunas told investors Canoo would make $120 million in 2021 and $250 million in 2022. However, the SEC alleges that the pair “should have known that these projections were unreasonable” because the projects it used to calculate these amounts “were unlikely to materialize.” The SEC also claims that Kranz failed to disclose nearly $1 million in executive compensation.
Apple hired Kranz in 2021 as part of its push to create its own electric car. Before leading Canoo, Kranz helped BMW launch its electric i3 hatchback in 2013 and joined the EV startup Faraday Future in 2016. After butting heads with Faraday Future’s CEO, Kranz and another BMW alum left the startup in 2017 to form Canoo. Although Kranz is no longer associated with Canoo, this latest legal battle adds to the pile of issues that the startup is facing.
In 2021, the SEC opened an investigation into Canoo, which the company has since agreed to settle for $1.5 million. Besides that, Canoo nearly ran out of cash and has picked up government-backed projects, such as creating shuttles for NASA’s Artemis crew, in order to stay afloat. Neither Apple nor Canoo immediately responded to The Verge’s request for comment about the new lawsuit.
As part of its suit, the SEC wants to prohibit Kranz and Balciunas from acting as “officers or directors” at public companies in the future. It’s also seeking to impose penalties on both of them. It’s not clear whether the SEC’s ban on Kranz serving as an officer or director would affect his position at Apple.