2024-03-22 sec-litreleases litigation_release 65 KB 1,951 chars

SEC v. Stephen Scott Burns, No. LR-25954, District of Columbia (Mar. 22, 2024) — Press Release

raw: Stephen Scott Burns

Stephen Scott Burns, No. 1:24-cv-00838 (D.D.C. Mar. 22, 2024)

Caption
SECURITIES AND EXCHANGE COMMISSION v. BURNS
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summary

Former Lordstown Motors CEO Stephen Scott Burns settled SEC fraud charges for misleading investors about electric truck pre-orders by agreeing to a $175,000 penalty and a two-year officer ban.

paragraph

The SEC charged Stephen Scott Burns with violating Sections 17(a)(2) and (3) of the Securities Act for misrepresenting demand for the Endurance electric pickup truck. Burns falsely claimed the company had over 100,000 nonbinding pre-orders from commercial fleet customers when most orders were actually from non-fleet entities. To settle the charges, Burns agreed to a $175,000 civil penalty and a two-year prohibition from serving as an officer or director of a public company.

narrative

The SEC has announced settled fraud charges against Stephen Scott Burns, the former Chairman and CEO of the bankrupt automaker Lordstown Motors Corp. The complaint alleges that Burns misled investors by claiming the company had an established demand of over 100,000 nonbinding pre-orders for its Endurance electric pickup truck from commercial fleet customers. In reality, most of these orders were submitted by companies that did not operate fleets or intend to use the trucks for their own operations. Burns was charged with violating the antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act of 1933. Without admitting or denying the allegations, Burns consented to a permanent injunction and a $175,000 civil penalty. Additionally, he is prohibited from serving as an officer or director of any publicly traded company for a period of two years. The settlement, filed in the U.S. District Court for the District of Columbia, remains subject to court approval.

Enriched metadata

Scheme
corporate-fraud (97%)
Court
District of Columbia
Case No.
1:24-cv-00838
Outcome
settled
Civil penalty
$175,000
Entity
Stephen Scott Burns
Classified corporate-fraud(confidence 97%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →
Statutes
Sections 17(a)(2) and (3) of the Securities ActSections 17(a)(2) and (3) of the Securities ActSections 17(a)(2) and (3) of the Securities Act
Parties
Securities and Exchange CommissionStephen Scott Burns
Keywords
burnsstephen scottscott burnssecsecurities exchangeexchange commissioncommercial fleetfleet customerslordstownstephenscottsecuritiesmisleadingformer chairmanlordstown motors

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 1
  • $175K $175,000 $100K–$1M
Entities 14
  • person Stephen Scott Burns ×2
  • person Alistaire Bambach
  • person carolyn winters
  • person David Baddley
  • person james carlson
  • person jeff leasure
  • person John Higgins
  • person Kristen Dieter
  • company lordstown motors corp.
  • person mark cave
  • person Mark Oh
  • person peter lallas
  • agency Securities and Exchange Commission
  • person Suzanne Romajas
Triples 5
  • Securities And Exchange Commission charged Stephen Scott Burns for misleading investors about pre-orders for Lordstown's Endurance electric pickup truck
  • Stephen Scott Burns made misleading statements about Lordstown's business in SEC filings and public statements regarding over 100,000 nonbinding pre-orders
  • Stephen Scott Burns consented to a permanent injunction, a $175,000 civil penalty, and a two-year prohibition from serving as officer or director of a publicly traded company
  • Securities And Exchange Commission filed a complaint in U.S. District Court for the District of Columbia alleging violations of Sections 17(a)(2) and (3) of the Securities Act of 1933
  • Securities And Exchange Commission investigated Stephen Scott Burns with assistance from Carolyn Winters, Mark Oh, John Higgins, David Baddley, Suzanne Romajas, and Peter Lallas
PDF (from attached: complaint)
In re Lordstown Motors Corp. · Source
Text layers
Extracted body text (1,951c) 
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. SEC Complaint
OCR text (1,951c · html-text · 99% conf) 
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. SEC Complaint

Related documents (1)