Federal investigators have searched Lion Electric’s Saint-Jérôme facilities following complaints from more than 100 investors, as authorities examine alleged financial misconduct connected to the company’s former ownership.

The Royal Canadian Mounted Police (RCMP) carried out searches at Lion Electric’s facilities in Saint-Jérôme, Quebec, on Wednesday as part of an ongoing investment fraud investigation. Officers arrived at approximately 10 a.m. to examine activities associated with the electric vehicle manufacturer’s previous ownership. RCMP spokesperson Corporal Martina Pilarova confirmed that investigators launched the inquiry in February 2025 after receiving complaints involving more than 100 investors. Given the size of the facilities, police indicated that the searches could continue for several days. No arrests or criminal charges were expected at this stage.

Investigators emphasized that the operation concerns Lion Electric’s historical business activities rather than its current management. The manufacturer, known for producing electric school buses, encountered severe financial difficulties before seeking creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in late 2024. A group of Quebec investors subsequently acquired the business in May 2025. Before that acquisition, the company had attracted significant investment as it expanded its electric vehicle and battery manufacturing operations. The Quebec government also provided substantial financial support, ultimately recording losses of approximately $140 million.

The company’s financial collapse prompted legal action from shareholders who allege they were misled about its financial condition and business prospects. A class-action lawsuit involving smaller investors targets Lion Electric’s former ownership and executives, with plaintiffs claiming that information provided while the company was publicly traded contributed to their investment losses. These allegations form part of the broader scrutiny surrounding the manufacturer’s previous operations, although police have not disclosed the specific transactions or individuals under examination in their criminal investigation.

Separately, Quebec’s Autorité des marchés financiers (AMF) announced an enforcement agreement involving investor Claude Roy on October 13. The Financial Markets Administrative Tribunal approved an administrative penalty of approximately $1.11 million and prohibited Roy from trading securities or participating professionally in financial markets for two years. Roy admitted to selling Lion Electric shares through nine transactions in November and December 2024 while possessing confidential information about a potential acquisition and the company’s anticipated creditor protection proceedings. The transactions allowed him to avoid losses estimated at nearly $800,000. The AMF matter is distinct from the RCMP investigation.

Lion Electric’s current management has sought to reassure stakeholders that the federal investigation does not concern the business operating under its new ownership. In a statement issued following the searches, the company confirmed that police were examining activities predating the May 2025 acquisition and pledged full cooperation with investigators. Management declined to comment further on the underlying allegations. The RCMP investigation remains ongoing, with authorities continuing to examine investor complaints and evidence relating to the company’s former operations.

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Originally published on Canadian Fraud News.