By Chris Prentice and Kanishka Singh
NEW YORK/ WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission on Thursday said it has settled charges against Lordstown Motors (OTC:RIDEQ) Corp that the electric vehicle manufacturer misled investors about the sales prospects of its flagship truck, the Endurance.
The regulator said Lordstown, which filed for bankruptcy in 2023, and its former Chairman and CEO Steve Burns misrepresented the company's plans to develop the first full-size electric pickup. The company exaggerated demand, claiming 100,000 pre-orders for the truck, and misrepresented the timeline for delivering the Endurance, the SEC said in a statement.
Lordstown, which Burns founded in 2019, went public through a blank-check company the following year. During and before the merger, Burns and the firm made materially false and misleading statements about Lordstown's business, regulators said.
A lawyer for Lordstown, which did not admit to or deny the SEC's findings, declined to comment. The firm agreed to a cease-and-desist order.
Burns said the SEC settlement with Lordstown Motors "falsely characterized" his actions.
"I categorically reject the suggestion that my actions constituted wrongdoing," he said in an emailed statement.
The SEC's order for Lordstown to disgorge $25.5 million of ill-gotten gains was deemed satisfied by its payments in class action lawsuits.
Clark Schaefer Hackett & Co, which acted as Lordstown's adviser and auditor, agreed to pay more than $80,000 in civil penalties, disgorgement and interest, as well as to improve its policies and procedures, in a separate SEC resolution, the regulator said.
A lawyer for the accounting and advisory firm did not respond immediately to request for comment.