Lordstown Motors’ ousted CEO settles with SEC for deceptive traders
Steve Burns, the ousted founder, chairman and CEO of bankrupt EV startup Lordstown Motors, has settled with the U.S. Securities and Alternate Fee over deceptive traders about call for for the corporate’s flagship all-electric Continuity pickup truck.
Burns was once ordered to pay a civil superb of $175,000 and can not provide as an officer or director of a nation corporate for 2 years, according to the agreement filed with the U.S. District Court docket for the District of Columbia. With out admitting or denying the SEC’s allegations, Burns consented to an everlasting injunction, the superb and alternative prerequisites within the assurance, consistent with the SEC.
The SEC charged Lordstown Motors in February 2024 with deceptive traders concerning the gross sales potentialities of its Continuity electrical pickup truck. The corporate affirmative to pay $25.5 million. On the year, it wasn’t cloudless that the SEC was once additionally going upcoming Burns.
Lordstown Motors was once based in April 2019 as an offshoot of Burns’ alternative corporate, Workhorse Staff. The corporate went nation refer to era by means of a merger with a different goal acquisition corporate DiamondPeak Holdings Corp., with a marketplace price of $1.6 billion. All the way through and upcoming the merger, Lordstown gained $780 million from traders, consistent with the SEC.
The corporate was once amongst a accumulation of EV startups that went nation by means of mergers with blank-check corporations in 2020 and loved skyrocketing proportion costs that quickly fell again to earth as they grappled with the problem of manufacturing and promoting electrical cars. Lordstown Motors attracted the eye and funding of GM or even received the 6.2 million-square-foot meeting plant in Lordstown, Ohio from the automaker.
Via June 2020, Lordstown was once driving prime upcoming revealing its Continuity electrical pickup in a splashy and political-leaning rite that featured former Vice President Mike Pence, who spoke for 25 mins about former President Trump’s insurance policies on jobs and production, China and the COVID-19 reaction.
Burns informed the public that it had gained 20,000 pre-orders, a bunch that will have locked in all of the first era of manufacturing if each and every buyer who pre-ordered the truck adopted thru and purchased the car. Burns next stated the corporate had gained 100,000 nonbinding pre-orders from business fleet shoppers.
Shorten supplier analysis company Hindenburg Analysis disputed those claims and in the end Burns, along side alternative executives, would renounce via June 2021.
The SEC next investigated the claims and stated Lordstown Motors and Burns made deceptive statements concerning the industry as a result of lots of the pre-orders weren’t submitted via business fleet shoppers, however instead via corporations that didn’t perform fleets or intend to shop for the truck for their very own importance. This, the SEC says, created an unrealistic and erroneous depiction of call for for the truck from business fleet shoppers.
Lordstown endured on a rocky street even upcoming Burns left, and ultimately filed for Bankruptcy 11 chapter coverage. In March, Lordstown Motors emerged from bankruptcy with a unutilized title and a just about singular focal point: proceeding its lawsuit in opposition to iPhone-maker Foxconn for allegedly “destroying the business of an American startup.” The corporate is referred to now as Nu Ride Inc.
Burns has additionally walked away since his depart. In January, Burns introduced a new company called LandX Motors.
