The former chief executive of Lordstown Motors, Steve Burns, has settled with the U.S. Securities and Exchange Commission for statements he made about demand for the electric Endurance pickup truck.
Burns had been sued by the SEC in a federal court in Washington for mispresenting preorders for the EV when he claimed the company had received 100,000 preorders from commercial fleets. Last week, he settled this lawsuit and agreed to pay a $175,000 penalty. He has also been banned from serving as an officer or director of a public company for two years.
Lordstown was founded in 2018 and in late 2019, took ownership of GM’s former factory in Lordstown, Ohio. The company went public through a reverse merger in 2020 and later that year, it even received support from then-President Donald Trump.
Read: Bankrupt Lordstown Faces $45 Million SEC Fine For Securities Violations
However, things started to fall apart in March 2021 when analysts from short-selling research firm Hindenburg Research revealed that the carmaker had misled investors and exaggerated the number of orders it had received.
It said that thousands of the firm’s claimed orders were non-binding and required no deposit. An internal investigation from Lordstown later found most preorders it had received were from intermediaries that had agreed to find buyers, Reuters reports.
Lordstown settled with the SEC last month for misleading investors about the demand for the Endurance.
Burns stepped down from his position at Lordstown in 2021 but his story with the company isn’t over. In October 2023, Burns agreed to pay $10 million to purchase the remaining assets of the carmaker after it filed for bankruptcy in June. The purchase included all Lordstown machinery, hub motor assembly lines, battery module assembly lines, battery pack assembly lines, all inventory, and other machinery.
