Lordstown founder agrees to $175,000 penalty in SEC settlement

The founder of bankrupt electric vehicle (EV) maker Lordstown Motors has settled with the Securities and Exchange Commission (SEC), after making misleading statements about demand years ago.

Former Lordstown CEO and founder Stephen Burns settled with the SEC for $175,000 on Friday, after overstating the demand for the company’s Endurance electric truck, according to Reuters. The lawsuit, which was filed in federal court, said Burns misrepresented the number of orders Lordstown received, around the same time the automaker went public in 2020.

In addition to paying $175,000, Burns is banned from serving as an executive officer or director of any public company for two years. Neither the SEC nor Burns’ company, LAS Capital, responded Reuters’ feedback requests.

General Motors no longer invests in Lordstown Motors

Burns founded the automaker in 2019, and later stepped down as Lordstown’s CEO and board chairman in 2021. His resignation followed a report from Hindenberg Research that called him out on claims that the automaker had secured 100,000 orders for the Endurance electric pickup truck. . The company’s board continued to investigate the claims, and found that many of the original orders were for middlemen who were expected to find buyers.

Throughout its short tenure as a company, Lordstown faced several production issues, problems getting its Endurance EVs delivered, and many ongoing financial problems.

Lordstown filed for bankruptcy last year after the automaker entered into an agreement to merge with the audit firm to go public in 2020. Burns divested his stake in the company last year and later bought back the company’s assets in a bankruptcy sale. .

In addition, Lordstown accused partner Foxconn of fraudulent behavior and “broken promises” in a lawsuit filed last year, saying the company did not follow through on an agreement to invest $170 million to help launch production.

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Lordstown founder agrees to $175,000 penalty in SEC settlement