The U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has reached a settlement with Lordstown Motors Corp, resolving charges that the electric vehicle manufacturer misled investors regarding the sales prospects of its flagship truck, the Endurance.
The SEC stated that Lordstown, which filed for bankruptcy in 2023, and its former Chairman and CEO Steve Burns, misrepresented the company’s plans to develop the first full-size electric pickup. The regulator alleged that the company exaggerated demand, claiming 100,000 pre-orders for the truck, and misrepresented the timeline for delivering the Endurance.
Lordstown, founded by Burns in 2019, went public through a blank-check company the following year. The SEC claimed that during and before the merger, Burns and the firm made materially false and misleading statements about Lordstown’s business.
A lawyer for Lordstown, which did not admit to or deny the SEC’s findings, declined to comment. The company agreed to a cease-and-desist order as part of the settlement.
In response to the SEC settlement, Burns stated, “I categorically reject the suggestion that my actions constituted wrongdoing.”
The SEC’s order for Lordstown to disgorge $25.5 million of ill-gotten gains was deemed satisfied by its payments in class action lawsuits.
Additionally, Clark Schaefer Hackett & Co, which acted as Lordstown’s adviser and auditor, agreed to pay more than $80,000 in civil penalties, disgorgement, and interest, as well as to improve its policies and procedures, in a separate SEC resolution.
