Bankrupt electric vehicle maker Lordstown Motors Corp. agreed to pay disgorgement of $25.5 million to settle charges from the SEC over alleged materially false and misleading statements regarding its flagship truck.
The EV maker in 2021 was hit with 11 class action lawsuits.
The EV truck manufacturer combined with DiamondPeak Holdings in October 2020 in a transaction valued at over $1.6 billion. Five months later, the SEC began a review of the deal. By June 2021, Lordstown was warning it might have to shut down.
Lordstown agreed to cease and desist from further violations in reaching settlement, the SEC announced. The disgorgement total will be deemed satisfied through payments by Lordstown and other defendants to resolve pending class actions against them, the commission added.
The settlement is pending bankruptcy court approval, Compliance Week reported.
The founder and former chief executive of Lordstown Motors, Steve Burns, agreed last fall to spend $10 million to purchase the assets of the bankrupt truck manufacturer.
Burns originally founded Lordstown in 2018 and led its IPO with a SPAC in 2020. However, he was forced to leave the automaker in 2021 after it was found that he had grossly overestimated order numbers for the Endurance pickup truck. Read more.
