SEC Settles Fraud Charges Against Former Lordstown Motors CEO – Business Journal Daily

SEC Settles Fraud Charges Against Former Lordstown Motors CEO – Business Journal Daily

YOUNGSTOWN, Ohio – The U.S. Securities and Exchange Commission announced Friday that it has dropped fraud charges against former CEO and chairman of Lordstown Motors Corp., Steve Burns.

The charges and settlement are part of a lawsuit filed in US District Court in Washington DC

The SEC’s complaint accuses Burns of violating the anti-fraud provisions of the Securities Act of 1933. Without admitting or denying the SEC’s allegations, Burns agreed to a permanent injunction, to pay a civil fine of $175,000, and to be prohibited from serving as an officer or director. of a publicly traded company over a period of two years. The settlement is subject to court approval.

According to the SEC’s complaint, Burns made misleading statements about Lordstown’s business in SEC filings and other public statements, including that Lordstown had a strong base of customer demand evidenced by more than 100,000 unfilled orders for its flagship vehicle, the take on the power of the Lordstown Endurance. .

As the complaint alleges, these statements were misleading because many of the initial orders were not submitted by commercial fleet customers, but by companies that did not operate a fleet or intend to purchase trucks for their own use, thus creating a false and inaccurate reality. a reflection of trucking demand from commercial fleet customers, the SEC said in a statement.

Burns and the company’s chief financial officer resigned in 2021 after a short-seller report questioned the executive’s statements related to advance orders. An internal investigation found that some of these statements were misleading.

In February, the SEC sued Lordstown Motors for violating federal securities laws. Lordstown agreed to a cease and desist order and forfeiture of $25.5 million to satisfy pending actions against the company.

Lordstown Motors filed for Chapter 11 bankruptcy on June 27, 2023. The EV company once owned and operated out of the former General Motors Lordstown plant. In late 2021, Foxconn purchased the factory and entered into a contract manufacturing agreement with Lordstown Motors to manufacture the Endurance.

In October, Burns, through his investment company LAS Capital LLC, bought the assets of Lordstown Motors from the bankruptcy court for 10 million dollars. Since then he has started a new project LandX.

Meanwhile, Lordstown Motor emerged from bankruptcy last week as a rebranded company, Nu Ride.

Pictured above: Steve Burns, November 2021 File Photo.

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