Lordstown Settles SEC Lawsuit for  Million

Lordstown Settles SEC Lawsuit for $25 Million

Lordstown Motors misled investors and violated the fraud, proxy, and reporting provisions of federal securities laws, according to charges filed by the Securities and Exchange Commission (SEC). Lordstown filed for bankruptcy in 2023.

Without accepting or denying the SEC’s findings and subject to the bankruptcy court’s approval, Lordstown agreed to a cease and desist order and a “dismissal” of $25.5 million, according to the SEC, which will be considered satisfied by the payment of up to $25.5 million to Lordstown and the defendants. others to resolve some of the pending class actions against them. Damages refers to the payment of illegal profits.

Read also: Lordstown Motors Founder Buys Endurance IP

According to the SEC’s settled order, Lordstown exaggerated demand for its Endurance electric pickup truck, claiming the company had received more than 100,000 non-binding “pre-orders” for the vehicle from commercial fleet customers. According to the SEC, most of the initial orders came from companies that did not operate a fleet or intended to purchase trucks for their own use.

The SEC’s order also found that Lordstown misrepresented the company’s schedule for delivering Endurance by failing to account for production delays due to Lordstown’s inability to access multiple critical parts.

“We contend that, in the highly competitive race to deliver the first mass-produced electric pickup truck to the U.S. market, Lordstown delivered on true Endurance demand,” said Mark Cave, associate director of operations. “Exaggerations that misrepresent a public company’s competitive advantages distort capital markets and undermine the ability of investors to make informed decisions about where to put their money.”

Source: SEC