SEC files charges against Lordstown Motors

YOUNGSTOWN, Ohio – Securities and Exchange Commission he announced filed a lawsuit Thursday against bankrupt Lordstown Motors, alleging it misled investors about sales prospects for the business’ electric pickup truck, the Endurance.

According to the SEC order, it says Lordstown overstated demand for the truck, which the company had previously said received more than 100,000 pre-closure orders. The SEC said most of the initial orders came from companies “that did not operate a fleet or intend to purchase trucks for their own use.”

The SEC said it also found that the company was not transparent with its schedule for Endurance, after failing to account for production delays. The SEC said the delay was due to Lordstown Motor’s inability to access 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 the true needs of the Endurance,” said Mark Cave, associate director of the Enforcement Division. “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.”

Overall, the SEC found that the company violated certain anti-fraud, proxy and reporting provisions of the federal securities laws. Lordstown Motors did not agree with or reject the SEC’s findings and has accepted a cease and desist order. The company will provide $25.5 million, which the SEC said will be taken “to satisfy the payment of up to $25.5 million by Lordstown and other defendants to resolve certain class actions pending against them.”

Founded in 2019, Lordstown Motors filed for bankruptcy in 2023. Earlier this year, the SEC also filed a $45 million lawsuit against the company for security violations.