The founder of bankrupt electric vehicle (EV) maker Lordstown Motors has settled with the Securities and Exchange Commission (SEC), after making misleading statements about demand years ago.
Former Lordstown CEO and founder Stephen Burns settled with the SEC for $175,000 on Friday, after overstating the level of demand for the company’s Endurance electric truck, according to Reuters. The lawsuit, which was filed in federal court, said that Burns misrepresented the number of preorders that Lordstown had received, around the same time that the automaker went public in 2020.
In addition to paying $175,000, Burns has been banned from being an executive officer or director of any public companies for two years. Neither the SEC or Burns’ company, LAS Capital, responded to Reuters’ requests for comment.
Burns founded the automaker in 2019, later stepping down as Lordstown’s CEO and board chair in 2021. His resignation followed a report from Hindenberg Research that called him out for claiming the automaker garnered 100,000 preorders for the Endurance electric pickup. The company’s board went on to perform an investigation on the claims, finding that most of the preorders had been to middlemen that would be expected to find buyers.
Throughout its short time as a company, Lordstown faced a number of production issues, difficulties getting its Endurance EVs delivered, and a slew of ongoing financial woes.
Lordstown went bankrupt last year after the automaker entered into a merger agreement with a blank-check company to go public in 2020. Burns offloaded his stake in the company last year and later bought back the company’s assets in a bankruptcy sale.
In addition, Lordstown accused partner Foxconn of fraudulent conduct and “broken promises” in a lawsuit filed last year, saying that the company didn’t follow through on agreements to invest as much as $170 million to help launch production.
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