Steve Burns, the ousted founder, chairman and CEO of bankrupt electric vehicle startup Lordstown Motors, settled with the U.S. Securities and Exchange Commission for misleading investors about the pickup truck lawsuit The company’s flagship all-electric Endurance pickup.
Burns was ordered to pay a $175,000 civil penalty and cannot serve as an officer or director of a public company for two years. according to the agreement filed in the United States District Court for the District of Columbia. Without admitting or denying the SEC’s allegations, Burns consented to a permanent injunction, the fine and other provisions in the settlement, according to the SEC.
The second loaded Lordstown Motors in February 2024 by misleading investors about the sales prospects of its Endurance electric pickup truck. The company agreed to pay $25.5 million. At the time, it was not clear that the SEC would also pursue Burns.
Lordstown Motors was founded in April 2019 as a subsidiary of Burns’ other company, Workhorse Group. The company went public the following year through a merger with special purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion. During and after the merger, Lordstown received $780 million from investors, according to the SEC.
The company was among a group of electric vehicle startups that went public through mergers with blank check companies in 2020 and enjoyed skyrocketing stock prices that soon fell back to earth as they faced the challenge of producing and sell electric vehicles. Lordstown Motors attracted GM’s attention and investment and even acquired the automaker’s 6.2 million square foot assembly plant in Lordstown, Ohio.
In June 2020, Lordstown was on a high after unveiling its Endurance electric pickup truck in a splashy, politically-leaning ceremony that featured former Vice President Mike Pence, who spoke for 25 minutes about former President Trump’s policies on jobs and manufacturing, China and the COVID-19 pandemic. 19 response.
Burns told the crowd that he had received 20,000 pre-orders, a number that would have been assured for the entire first year of production if every customer who pre-ordered the truck followed through and purchased the vehicle. Burns later said the company had received 100,000 non-binding pre-orders from commercial fleet customers.
Short seller research firm Hindenburg Research disputed those claims and Burns, along with other executives, would ultimately resign in June 2021.
The SEC later investigated the claims and said Lordstown Motors and Burns made misleading statements about the business because most of the pre-orders were submitted not by commercial fleet customers, but by companies that did not operate fleets or intend to purchase the truck for their own use. This, the SEC says, created an unrealistic and inaccurate depiction of demand for the truck by commercial fleet customers.
Lordstown continued down a rocky path even after Burns left, eventually filing for Chapter 11 bankruptcy protection. In March, Lordstown Motors came out of bankruptcyand with a new name and an almost singular focus: continuing its lawsuit against iPhone maker Foxconn for allegedly “destroy the business of an American startup.” The company is now known as Nu Ride Inc.
Burns has also moved on since his resignation. In January, Burns released a new company called LandX Motors.