U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25954 / March 22, 2024
Securities and Exchange Commission v. Stephen Scott Burns, No. 1:24-cv-00838 (D.D.C. filed March 22, 2024)
SEC Charges Former Chairman and CEO of Lordstown Motors Corp. for Misleading Investors
The Securities and Exchange Commission announced settled fraud charges against Stephen Scott Burns, former Chairman and CEO of bankrupt automaker Lordstown Motors Corp., for misleading investors about “pre-orders” for Lordstown’s flagship electric pickup truck called Endurance.
According to the SEC’s complaint, Burns made misleading statements about Lordstown’s business in SEC filings and other public statements, including that Lordstown had an established base of customer demand evidenced by more than 100,000 nonbinding pre-orders from commercial fleet customers. As the complaint alleges, these statements were misleading because most of the pre-orders were not submitted by commercial fleet customers, but rather by companies that did not operate fleets or intend to buy the truck for their own use, thereby creating an unrealistic and inaccurate depiction of demand for the truck from commercial fleet customers.
The SEC’s complaint, filed in U.S. District Court for the District of Columbia, charges Burns with violating the antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act of 1933. Without admitting or denying the SEC’s allegations, Burns consented to a permanent injunction, to pay a $175,000 civil penalty, and to be prohibited from serving as an officer or director of a publicly traded company for a period of two years. The settlement is subject to court approval.
he SEC’s investigation was conducted by Carolyn Winters, Mark Oh, and John Higgins, with assistance from David Baddley, Suzanne Romajas, and Peter Lallas, and supervised by Jeff Leasure, Kristen Dieter, Alistaire Bambach, James Carlson, and Mark Cave.