Steve Burns, the ousted founder, chairman and CEO of bankrupt EV startup Lordstown Motors, has settled with the U.S. Securities and Change Fee over deceptive buyers about demand for the corporate’s flagship all-electric Endurance pickup truck.
Burns was ordered to pay a civil high quality of $175,000 and can’t function an officer or director of a public firm for 2 years, in line with the settlement 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 a everlasting injunction, the high quality and different stipulations within the settlement, in line with the SEC.
The SEC charged Lordstown Motors in February 2024 with deceptive buyers concerning the gross sales prospects of its Endurance electrical pickup truck. The corporate agreed to pay $25.5 million. On the time, it wasn’t clear that the SEC was additionally going after Burns.
Lordstown Motors was based in April 2019 as an offshoot of Burns’ different firm, Workhorse Group. The corporate went public the next yr by way of a merger with a particular function acquisition firm DiamondPeak Holdings Corp., with a market worth of $1.6 billion. Throughout and after the merger, Lordstown obtained $780 million from buyers, in line with the SEC.
The corporate was amongst a batch of EV startups that went public by way of mergers with blank-check firms in 2020 and loved skyrocketing share costs that quickly fell again to earth as they grappled with the problem of manufacturing and promoting electrical autos. Lordstown Motors attracted the eye and funding of GM and even acquired the 6.2 million-square-foot meeting plant in Lordstown, Ohio from the automaker.
By June 2020, Lordstown was using excessive after revealing its Endurance electrical pickup in a splashy and political-leaning ceremony that featured former Vice President Mike Pence, who spoke for 25 minutes about former President Trump’s insurance policies on jobs and manufacturing, China and the COVID-19 response.
Burns instructed the gang that it had obtained 20,000 pre-orders, a quantity that might have locked in your entire first yr of manufacturing if each buyer who pre-ordered the truck adopted by means of and purchased the automobile. Burns later mentioned the corporate had obtained 100,000 nonbinding pre-orders from business fleet clients.
Brief vendor analysis agency Hindenburg Analysis disputed these claims and in the end Burns, together with different executives, would resign by June 2021.
The SEC later investigated the claims and mentioned Lordstown Motors and Burns made deceptive statements concerning the enterprise as a result of many of the pre-orders weren’t submitted by business fleet clients, however slightly by firms that didn’t function fleets or intend to purchase the truck for their very own use. This, the SEC says, created an unrealistic and inaccurate depiction of demand for the truck from business fleet clients.
Lordstown continued on a rocky highway even after Burns left, and finally filed for Chapter 11 chapter safety. In March, Lordstown Motors emerged from chapter with a brand new title and a virtually singular focus: persevering with its lawsuit in opposition to iPhone-maker Foxconn for allegedly “destroying the enterprise of an American startup.” The corporate is now often known as Nu Journey Inc.
Burns has additionally moved on since his resignation. In January, Burns launched a new firm known as LandX Motors.
