SEC v. Stephen Scott Burns, No. 1:24-cv-00838, District of Columbia (Mar. 22, 2024) — Complaint

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,
100 F Street, N.E.
Washington, DC 20549,

    Plaintiff,

v. Civil Action No. 1:24-cv-838

STEPHEN SCOTT BURNS,

                                                Defendant.

COMPLAINT
  Plaintiff  United  States  Securities  and  Exchange  Commission  (“SEC”)  alleges  for  its
Complaint as follows:
SUMMARY
1. This action arises from certain inaccurate statements by Defendant Stephen Scott
Burns (“Burns”), the former Chairman and Chief Executive Officer (“CEO”) of Lordstown Motors
Corp. (“Lordstown”), an original equipment manufacturer of electric light duty vehicles focused
on  the  commercial  fleet  market,  concerning  Lordstown’s  progress  toward  bringing  to  market  a
full-size electric pickup truck.
2. Lordstown,  founded  by  Burns  in  2019,  became  publicly  traded  in  October  2020
through  a  merger  with  a  special  purpose  acquisition  company  (“SPAC”)  called  DiamondPeak
Holdings  Corporation  (“DiamondPeak”).    During  and  after  the  merger,  as  a  result  of  which
Lordstown  received  over  $780  million  from  investors,  Lordstown  and  Burns  made  materially

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inaccurate  statements  about  Lordstown’s  business  in  SEC  filings  and  other  public  statements,
including that Lordstown already had an established base of customer demand evidenced by tens
of thousands of “pre-orders” from commercial fleet customers.
3. Burns’  statements  negligently  created  an  unrealistic  and  inaccurate  depiction  of
demand for the truck from commercial fleet customers.
4. By  engaging  in  the  conduct  described  in  this  Complaint,  Defendant  violated
Sections  17(a)(2)  and  17(a)(3)  of  the  Securities  Act  of  1933  (“Securities  Act”)  [15  U.S.C.
§§ 77q(a)(2) and 77q(a)(3)].
JURISDICTION AND VENUE
5. This Court has jurisdiction over this action pursuant to Sections 20 and 22 of the
Securities Act [15 U.S.C. §§ 77t and 77v].
6. Venue is proper in this judicial district pursuant to Section 22 of the Securities Act
[15  U.S.C.  §  77v]  because  certain  violations  of  the  securities  laws  alleged  in  this  Complaint
occurred within this district, including Lordstown’s filing of false and misleading reports with the
SEC.    Defendant  has  consented  to  personal  and  subject-matter  jurisdiction  and  waived  any
objection to venue in this Court.
DEFENDANT
7. Stephen Scott Burns resides in Maineville, Ohio.  Burns was the founder, a director,
and  the  CEO  of  Lordstown  from  April  2019  to  October  2020,  when  he  became  Lordstown’s
Chairman of the Board of Directors and CEO.  Defendant resigned from both positions in June
2021.

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RELEVANT ENTITIES
8. Lordstown Motors Corp. is incorporated in Delaware with its principal place of
business  in  Lordstown,  Ohio  during  the  relevant  period  of  this  Complaint.    Lordstown  was  an
original equipment manufacturer of electric light duty vehicles focused on the commercial fleet
market.  Lordstown’s Class A common stock traded on the Nasdaq Global Stock Market under the
symbol “RIDE” from October 26, 2020 until July 7, 2023, when it began trading on the over-the-
counter market under the symbol “RIDEQ.”  Since October 2020, Lordstown’s common stock was
registered with the SEC under Section 12 of the Exchange Act [15 U.S.C. § 78l], and Lordstown
was required to file periodic reports with the SEC pursuant to Section 13(a) of the Exchange Act
[15 U.S.C. § 78m].  On June 27, 2023, Lordstown commenced voluntary bankruptcy proceedings
under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware.  In re Lordstown Motors Corp., No. 23-10831 (Bankr. D. Del.).  On March 5, 2024, the
Bankruptcy  Court  entered  an  order  confirming  Lordstown’s  bankruptcy  plan,  and  Lordstown
emerged  from  bankruptcy  on  March  14,  2024  under  the  name  “Nu  Ride  Inc.,”  changed  its
headquarters from Lordstown, Ohio to New York, New York, and changed the ticker symbol of
its common stock to “NRDE.”
9. DiamondPeak  Holdings  Corporation  was  a  Delaware  corporation  with  its
principal place of business in New York, NY, and a SPAC that merged with Lordstown effective
October 23, 2020.  From March 4, 2019 to October 23, 2020, DiamondPeak’s Class A common
stock was registered with the SEC under Section 12 of the Exchange Act [15 U.S.C. § 78l], and
traded  on  the  Nasdaq  Capital  Market  under  the  symbol  “DPHC.”    During  that  period,
DiamondPeak was required to file periodic reports with the SEC pursuant to Section 13(a) of the
Exchange Act [15 U.S.C. § 78m].  DiamondPeak changed its name to Lordstown after the merger.

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FACTS
10. Burns founded then-private Lordstown in April 2019 for the purpose of developing
and  manufacturing  light  duty  electric  trucks  targeted  for  sale  to  fleet  customers.    Since  its
inception, Lordstown had been developing its flagship vehicle, the Endurance, an electric full-size
pickup truck, for the commercial fleet market.  To manufacture the Endurance, in November 2019
Lordstown  acquired  from  General  Motors  Company  an  assembly  and  manufacturing  plant  in
Lordstown, Ohio.
11. On August 3, 2020, DiamondPeak and Lordstown announced that they had entered
into a proposed business combination transaction via a merger agreement.  The merger transaction
closed  on  October  23,  2020.    DiamondPeak  changed  its  name  to  Lordstown,  Burns  became  its
Chairman and CEO, and, on October 26, 2020, Lordstown’s common stock and public warrants
began to trade publicly.
12. In connection with the merger, Lordstown received approximately $675 million in
proceeds from DiamondPeak’s cash held in trust and from a private investment in public equity
(“PIPE”) offering to accredited investors.  Also in connection with the merger, Lordstown assumed
publicly  traded  and  private  warrants  previously  issued  by  DiamondPeak  in  its  initial  public
offering in March 2019, and additional private warrants issued for the merger.
13. Burns received over 46 million shares of Lordstown’s stock in connection with the
merger,  making  him  Lordstown’s  largest  shareholder.    The  shares  were  subject  to  a  two-year
lockup period and were not sold during the period relevant to this Complaint.
14. On November 12, 2020, Lordstown filed a registration statement and prospectus on
Form S-1 to register its common stock, its publicly traded and private warrants, and for resale the
shares issued in the PIPE offering.  The Form S-1 was declared effective on December 4, 2020.

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15. On  December  16,  2020,  Lordstown  issued  a  redemption  notice  for  the  public
warrants, and on January 27, 2021 Lordstown redeemed all of the public warrants and received
approximately $107 million from investors who exercised the warrants.
16. On December 28, 2020, Lordstown filed a registration statement and prospectus on
Form S-8 to register certain of its common stock and stock options issued or to be issued to certain
of its directors, officers, and employees under incentive compensation plans.
Disclosure Failures About Pre-Orders for the Endurance
17. From  August  3,  2020  to  February  6,  2021,  in  SEC  filings  and  other  public
statements,  Lordstown  and  Burns  made  a  series  of  materially  inaccurate  statements  about
Lordstown’s pre-orders for the Endurance.
Background of Lordstown’s Pre-Orders
18. To  estimate  the  demand  for  the  Endurance,  Lordstown’s  sales  team  contacted
potential customers beginning in early 2020, and asked them to sign a form of a non-binding letter
of  intent  and  reservation  agreement  (“LOI”)  specifying  the  quantity  of  Endurance  trucks  the
potential  customer  wished  to  reserve.    The  LOI  by  its  terms  was  a  one-page,  form  agreement
prepared by Lordstown that did not require payment of any kind by the potential customer, and
the potential customer was under no obligation to purchase the Endurance.
19. In  SEC  filings  and  other  public  statements,  Lordstown  described  these  LOIs  as
“pre-orders”  from  or  primarily  from  fleet  operators,  and  generally  that  the  pre-orders  were  not
binding  and  did  not  require  any  deposit.    Lordstown  further  qualified  that  there  could  be  no
assurance  that  Lordstown  will  successfully  convert  the  pre-orders  into  binding  orders  or  sales.
During the relevant period, Lordstown and Burns used the terms LOIs, reservations, pre-orders,
and “pre-sales” interchangeably as having the same meaning.

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20. Pre-orders were an important metric for Lordstown because, as a startup company
developing  a  new  product,  Lordstown  had  no  orders  or  sales  to  report  to  investors.    Because
Lordstown’s business purpose was to develop and manufacture the Endurance for the commercial
fleet market, pre-orders were also important for potential fleet customers, who Burns believed may
have been more comfortable buying a truck from a new manufacturer that their peers were also
buying.  Burns and Lordstown believed that increasing numbers of pre-orders from fleets would
create  further  demand  for  the  Endurance.    After  the  merger  with  DiamondPeak,  Burns  directed
Lordstown’s sales team to obtain additional pre-orders from customers to increase the total amount
because pre-orders were “[r]eally important to the investment community and to our prospect[ive]
fleet customers.”
21. Lordstown did not have any formalized policies or procedures to evaluate pre-order
counterparties.    Lordstown’s  sales  team,  which  reported  to  Burns,  was  comprised  mostly  of
individuals with no sales experience in the automotive industry, and was not given any instructions
or guidance to determine whether a customer was a commercial fleet.  In addition, Lordstown did
not have policies or procedures for recording, tracking, or maintaining pre-order data.
22. After Lordstown announced in August 2020 that it had secured 27,000 pre-orders
for  the  Endurance  from  fleet  customers,  Lordstown,  at  Burns’  direction,  continued  to  solicit
potential fleet customers to assess eventual production capacity and to increase the number of pre-
orders to highlight to potential investors and customers.  Throughout the fall of 2020, Lordstown
and Burns made numerous public statements touting increasing numbers of pre-orders from fleet
customers.  On January 11, 2021, Lordstown issued a press release stating it had received 100,000
pre-orders  from  commercial  fleets,  which  Burns  described  as  “unprecedented  in  automotive
history.”

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23. On March 12, 2021, however, a third-party research firm, which had taken a short
position  in  Lordstown’s  stock,  published  a  report  that  alleged,  among  other  things,  that
Lordstown’s 100,000 pre-orders were largely fictitious and nonbinding, and from customers that
generally did not even have fleets of vehicles.  Shortly after the report was published, Lordstown’s
Board of Directors formed a Special Committee to investigate its allegations.
24. On June 14, 2021, the Special Committee issued a public statement addressing the
allegations, and stated that certain statements by Lordstown concerning pre-orders were “in certain
respects,  inaccurate.”    The  Special  Committee  determined  that,  while  Lordstown  had  stated  on
several  occasions  that  its  pre-orders  were  from,  or  “primarily”  from  commercial  fleets,  in  fact
many  pre-orders  were  obtained  from  (i)  fleet  management  companies  or  other  end  users  that
indicated interest in purchasing Endurance trucks, similar to commercial fleets, and (ii) so-called
“influencers” or other potential strategic partners that committed to attempt to secure pre-orders
from  other  entities,  but  did  not  intend  to  purchase  Endurance  trucks  directly.    The  Special
Committee also stated that one entity that provided a large number of pre-orders did not appear to
have the resources to complete large purchases of trucks.  It also found that other entities provided
commitments that appeared too vague or infirm to have been appropriately included in the total
number of pre-orders disclosed by Lordstown.
Lordstown’s Pre-Orders Were Not All From or Primarily From Fleet Customers
25. On  September  21,  2020,  DiamondPeak  filed  a  preliminary  proxy  statement  to
solicit  votes  for  its  merger  with  Lordstown.    In  the  proxy  statement  Lordstown  stated  it  had
“received pre-orders primarily from fleet operators to purchase over 38,000 Endurance vehicles.”
In  fact,  according  to  the  Special  Committee’s  analysis,  pre-orders  from  intermediaries  or
influencers, and not fleets, comprised over 40% of the 38,000 amount, including pre-orders from

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customers that Burns and Lordstown reasonably should have understood lacked apparent resources
or intent to buy large quantities of the Endurance.
26. On October 26, 2020, the first day of trading for Lordstown’s common stock, Burns
stated  in  an  interview  by  The  Detroit  News  that  Lordstown  had  “pre-sold  40,000  of  [the
Endurance]  to  fleet  customers  already.”    On  November  12,  2020,  Lordstown  filed  a  Form  S-1,
signed  by  Burns,  stating  it  currently  had  “pre-orders  primarily  from  fleet  operators  to  purchase
over  44,000  vehicles[.]”    According  to  the  Special  Committee’s  analysis,  48%  of  the  40,000
amount was from intermediaries or influencers.
27. On November 16, 2020, Lordstown issued a press release stating it had “received
approximately  50,000  non-binding  production  reservations  from  commercial  fleets....”    On  the
same date, Burns stated in a capital markets-oriented forum that Lordstown had “50,000 pre-sales
already,  all  from  fleets.”    On  November  17,  2020,  Burns  stated  in  an  interview  by  CNBC  that
Lordstown had received “50,000 preorders,” sold to “fleets,” and described the pre-orders as “very
serious orders.”   Lordstown’s Form S-1/A, signed by Burns and filed on December 1, 2020, stated
it  had  “received  pre-orders  primarily  from  fleet  operators  to  purchase  approximately  50,000
Endurance vehicles.”  According to the Special Committee’s analysis, however, 50% of the 50,000
amount was from intermediaries or influencers.  On December 2, 2020, Burns stated in an investor
conference, “[w]e have 50,000 pre-orders already, well in advance of what we thought we would
have[,] ... almost $3 billion in pre-orders already.”
28. On December 21, 2020, at Burns’ direction, Lordstown posted on social media and
filed  a  Form  8-K  stating  it  had  received  “80,000  non-binding  reservations  for  the  Endurance  to
date.”  Although the statements did not specify whether the pre-orders were from or primarily from
fleets, they implied that the pre-orders were from or primarily from fleets, consistent with prior

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statements.    The  80,000  amount  also  included  a  pre-order  for  5,000  trucks  (representing  $263
million  in  potential  revenue)  by  a  customer  who  later  canceled  the  pre-order  due  to  a
misunderstanding,  but  Lordstown’s  sales  team  continued  to  count  it  towards  the  total  amount.
According to the Special Committee’s analysis, 67% of the 80,000 amount at this time was from
intermediaries or influencers.
29. On January 11, 2021, Lordstown issued a press release stating that Lordstown “has
received more than 100,000 non-binding production reservations from commercial fleets....”  The
press release quoted Burns as saying, “[r]eceiving 100,000 pre-orders from commercial fleets for
a truck like the Endurance is unprecedented in automotive history....”  According to the Special
Committee’s analysis, however, by that time 71% of the 100,000 amount was from intermediaries
or influencers.  The 100,000 amount also included a verbal indication of interest from a customer
who  would  agree  to  an  “influencer”  memorandum  of  understanding,  which,  as  Burns  knew  or
should have known, was not executed at the time.  This memorandum of understanding was not a
pre-order  agreement  or  an  LOI  to  buy  Lordstown’s  Endurance,  but  rather  an  understanding  “to
assist  Lordstown  in  generating  leads  to  support  the  sale  of  up  to  15,000  Endurance  trucks  by
December 31, 2023.”  This customer expressly informed Lordstown that it did not have a fleet and
did  not  intend  to  buy  any  trucks.   In interviews with a research analyst and on media outlets in
January and February 2021, Burns stated that the 100,000 pre-orders were submitted by “fleets,”
and described the pre-orders as “sticky.”
30. Lordstown and Burns’ statements about the increasing numbers of pre-orders from
27,000 to 100,000 were materially inaccurate.  First, as Burns knew or should have known, the
pre-orders were not all from or primarily from fleet customers, a market Lordstown had described
in SEC filings as “commercial or governmental organizations with three or more trucks.”  As the

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Special  Committee  found,  40%  to  71%  of  the  pre-orders  during  this  period  were  from
intermediaries  or  influencers  who  indicated  they  would  encourage,  facilitate,  or  influence  the
purchase  of  the  Endurance  and  did  not  intend  to  buy  it  for  their  own  use.    Second,  Burns’
statements  that  the  pre-orders  were  “very  serious  orders”  or  “sticky”  were  inaccurate  because
Burns knew the pre-orders were non-binding and customers were not obligated to purchase any
trucks.    Third,  the  pre-orders  included  large  quantities  from  customers  who,  as  Burns  knew  or
should  have  known,  had  no  apparent  ability  or  intent  to  buy  such  quantities  of  the  truck.    As  a
result,  Lordstown  and  Burns,  who  knew  or  should  have known that certain pre-orders were not
from  or  primarily  from  fleets,  inaccurately  reflected  the  true  nature  of  the  demand  for  the
Endurance.
CLAIMS FOR RELIEF
First Claim
Violations of Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2)
31. The  SEC  re-alleges  and  incorporates  by  reference  paragraphs  1  through  30  as
though fully set forth herein.
32. Burns has, by engaging in the conduct set forth above, directly or indirectly, in the
offer or sale of securities, by use of means or instrumentalities of interstate commerce or of the
mails, obtained money or property by means of untrue statements of material fact or by omitting
to state a material fact necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
33. By reason of the foregoing, Burns violated, and unless restrained and enjoined, will
continue to violate, Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)].

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Second Claim
Violations of Section 17(a)(3) of the Securities Act, 15 U.S.C. § 77q(a)(3)
34. The  SEC  re-alleges  and  incorporates  by  reference  paragraphs  1  through  30  as
though fully set forth herein.
35. Burns has, by engaging in the conduct set forth above, directly or indirectly, in the
offer or sale of securities, by use of means or instrumentalities of interstate commerce or of the
mails, engaged in transactions, practices, or courses of business which operated or would operate
as a fraud or deceit upon purchasers of securities.
36. By reason of the foregoing, Burns violated, and unless restrained and enjoined, will
continue to violate, Section 17(a)(3) of the Securities Act [15 U.S.C. § 77q(a)(3)].
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that this Court:
A. Find that Defendant committed the violations alleged in this Complaint;
B. Enter an injunction, in a form consistent with Rule 65 of the Federal Rules of Civil
Procedure, permanently restraining and enjoining Defendant from violating, directly or indirectly,
the laws Defendant is alleged to have violated in this Complaint;
C. Order  Defendant  to  pay  a  civil  money  penalty  pursuant  to  Section  20(d)  of  the
Securities Act [15 U.S.C. § 77t(d)];
D. Issue an order, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u]
and  this  Court’s  inherent  equitable  powers,  prohibiting  Defendant  from  serving  as  an  officer  or
director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange
Act, [15 U.S.C. § 78l], or that is required to file reports pursuant to Section 15(d) of the Exchange
Act [15 U.S.C. § 78o(d)], as appropriate or necessary for the benefit of investors;

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E. Grant,  pursuant  to  Section  21(d)(5)  of  the  Exchange  Act  [15  U.S.C.  §  78u],  any
other equitable relief that may be appropriate or necessary for the benefit of investors; and
F. Retain jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered, or to entertain any suitable application or motion for additional relief
within the jurisdiction of this Court.
Respectfully submitted,

Date:            March            22,            2024.                                                s/Mark            M.            Oh
James M. Carlson (DC Bar No. 981364)
[email protected]
202-551-3711

Jeffrey G. Leasure (DC Bar No. 495458)
[email protected]
202-551-4407

Suzanne J. Romajas
[email protected]
202-551-4473

Peter C. Lallas (DC Bar No. 495944)
[email protected]
202-551-6864

Mark M. Oh (DC Bar No. 477310)
202-551-4436
[email protected]

U.S. Securities and Exchange Commission
                                                                        100            F            Street,            N.E.
                                                                        Washington,            DC            20549

 Attorneys for Plaintiff
United States Securities and Exchange Commission

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLUMBIA 

 
 
   
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, 
100 F Street, N.E. 
Washington, DC 20549, 
 
    Plaintiff, 

 

  
v. Civil Action No. 1:24-cv-838 

  
STEPHEN SCOTT BURNS,  
 
    Defendant. 

 

  
 
 

COMPLAINT 

 Plaintiff United States Securities and Exchange Commission (“SEC”) alleges for its 

Complaint as follows: 

SUMMARY 

1. This action arises from certain inaccurate statements by Defendant Stephen Scott 

Burns (“Burns”), the former Chairman and Chief Executive Officer (“CEO”) of Lordstown Motors 

Corp. (“Lordstown”), an original equipment manufacturer of electric light duty vehicles focused 

on the commercial fleet market, concerning Lordstown’s progress toward bringing to market a 

full-size electric pickup truck.  

2. Lordstown, founded by Burns in 2019, became publicly traded in October 2020 

through a merger with a special purpose acquisition company (“SPAC”) called DiamondPeak 

Holdings Corporation (“DiamondPeak”).  During and after the merger, as a result of which 

Lordstown received over $780 million from investors, Lordstown and Burns made materially 

Case 1:24-cv-00838   Document 2   Filed 03/22/24   Page 1 of 12



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inaccurate statements about Lordstown’s business in SEC filings and other public statements, 

including that Lordstown already had an established base of customer demand evidenced by tens 

of thousands of “pre-orders” from commercial fleet customers. 

3. Burns’ statements negligently created an unrealistic and inaccurate depiction of 

demand for the truck from commercial fleet customers.  

4. By engaging in the conduct described in this Complaint, Defendant violated 

Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

§§ 77q(a)(2) and 77q(a)(3)]. 

JURISDICTION AND VENUE 

5. This Court has jurisdiction over this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v]. 

6. Venue is proper in this judicial district pursuant to Section 22 of the Securities Act 

[15 U.S.C. § 77v] because certain violations of the securities laws alleged in this Complaint 

occurred within this district, including Lordstown’s filing of false and misleading reports with the 

SEC.  Defendant has consented to personal and subject-matter jurisdiction and waived any 

objection to venue in this Court. 

DEFENDANT 

7. Stephen Scott Burns resides in Maineville, Ohio.  Burns was the founder, a director, 

and the CEO of Lordstown from April 2019 to October 2020, when he became Lordstown’s 

Chairman of the Board of Directors and CEO.  Defendant resigned from both positions in June 

2021. 

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RELEVANT ENTITIES 

8. Lordstown Motors Corp. is incorporated in Delaware with its principal place of 

business in Lordstown, Ohio during the relevant period of this Complaint.  Lordstown was an 

original equipment manufacturer of electric light duty vehicles focused on the commercial fleet 

market.  Lordstown’s Class A common stock traded on the Nasdaq Global Stock Market under the 

symbol “RIDE” from October 26, 2020 until July 7, 2023, when it began trading on the over-the-

counter market under the symbol “RIDEQ.”  Since October 2020, Lordstown’s common stock was 

registered with the SEC under Section 12 of the Exchange Act [15 U.S.C. § 78l], and Lordstown 

was required to file periodic reports with the SEC pursuant to Section 13(a) of the Exchange Act 

[15 U.S.C. § 78m].  On June 27, 2023, Lordstown commenced voluntary bankruptcy proceedings 

under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of 

Delaware.  In re Lordstown Motors Corp., No. 23-10831 (Bankr. D. Del.).  On March 5, 2024, the 

Bankruptcy Court entered an order confirming Lordstown’s bankruptcy plan, and Lordstown 

emerged from bankruptcy on March 14, 2024 under the name “Nu Ride Inc.,” changed its 

headquarters from Lordstown, Ohio to New York, New York, and changed the ticker symbol of 

its common stock to “NRDE.” 

9. DiamondPeak Holdings Corporation was a Delaware corporation with its 

principal place of business in New York, NY, and a SPAC that merged with Lordstown effective 

October 23, 2020.  From March 4, 2019 to October 23, 2020, DiamondPeak’s Class A common 

stock was registered with the SEC under Section 12 of the Exchange Act [15 U.S.C. § 78l], and 

traded on the Nasdaq Capital Market under the symbol “DPHC.”  During that period, 

DiamondPeak was required to file periodic reports with the SEC pursuant to Section 13(a) of the 

Exchange Act [15 U.S.C. § 78m].  DiamondPeak changed its name to Lordstown after the merger.  

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FACTS 

10. Burns founded then-private Lordstown in April 2019 for the purpose of developing 

and manufacturing light duty electric trucks targeted for sale to fleet customers.  Since its 

inception, Lordstown had been developing its flagship vehicle, the Endurance, an electric full-size 

pickup truck, for the commercial fleet market.  To manufacture the Endurance, in November 2019 

Lordstown acquired from General Motors Company an assembly and manufacturing plant in 

Lordstown, Ohio. 

11. On August 3, 2020, DiamondPeak and Lordstown announced that they had entered 

into a proposed business combination transaction via a merger agreement.  The merger transaction 

closed on October 23, 2020.  DiamondPeak changed its name to Lordstown, Burns became its 

Chairman and CEO, and, on October 26, 2020, Lordstown’s common stock and public warrants 

began to trade publicly.  

12. In connection with the merger, Lordstown received approximately $675 million in 

proceeds from DiamondPeak’s cash held in trust and from a private investment in public equity 

(“PIPE”) offering to accredited investors.  Also in connection with the merger, Lordstown assumed 

publicly traded and private warrants previously issued by DiamondPeak in its initial public 

offering in March 2019, and additional private warrants issued for the merger. 

13. Burns received over 46 million shares of Lordstown’s stock in connection with the 

merger, making him Lordstown’s largest shareholder.  The shares were subject to a two-year 

lockup period and were not sold during the period relevant to this Complaint. 

14. On November 12, 2020, Lordstown filed a registration statement and prospectus on 

Form S-1 to register its common stock, its publicly traded and private warrants, and for resale the 

shares issued in the PIPE offering.  The Form S-1 was declared effective on December 4, 2020.  

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15. On December 16, 2020, Lordstown issued a redemption notice for the public 

warrants, and on January 27, 2021 Lordstown redeemed all of the public warrants and received 

approximately $107 million from investors who exercised the warrants. 

16. On December 28, 2020, Lordstown filed a registration statement and prospectus on 

Form S-8 to register certain of its common stock and stock options issued or to be issued to certain 

of its directors, officers, and employees under incentive compensation plans. 

Disclosure Failures About Pre-Orders for the Endurance 

17. From August 3, 2020 to February 6, 2021, in SEC filings and other public 

statements, Lordstown and Burns made a series of materially inaccurate statements about 

Lordstown’s pre-orders for the Endurance. 

Background of Lordstown’s Pre-Orders 

18. To estimate the demand for the Endurance, Lordstown’s sales team contacted 

potential customers beginning in early 2020, and asked them to sign a form of a non-binding letter 

of intent and reservation agreement (“LOI”) specifying the quantity of Endurance trucks the 

potential customer wished to reserve.  The LOI by its terms was a one-page, form agreement 

prepared by Lordstown that did not require payment of any kind by the potential customer, and 

the potential customer was under no obligation to purchase the Endurance. 

19. In SEC filings and other public statements, Lordstown described these LOIs as 

“pre-orders” from or primarily from fleet operators, and generally that the pre-orders were not 

binding and did not require any deposit.  Lordstown further qualified that there could be no 

assurance that Lordstown will successfully convert the pre-orders into binding orders or sales.  

During the relevant period, Lordstown and Burns used the terms LOIs, reservations, pre-orders, 

and “pre-sales” interchangeably as having the same meaning. 

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6 

20. Pre-orders were an important metric for Lordstown because, as a startup company 

developing a new product, Lordstown had no orders or sales to report to investors.  Because 

Lordstown’s business purpose was to develop and manufacture the Endurance for the commercial 

fleet market, pre-orders were also important for potential fleet customers, who Burns believed may 

have been more comfortable buying a truck from a new manufacturer that their peers were also 

buying.  Burns and Lordstown believed that increasing numbers of pre-orders from fleets would 

create further demand for the Endurance.  After the merger with DiamondPeak, Burns directed 

Lordstown’s sales team to obtain additional pre-orders from customers to increase the total amount 

because pre-orders were “[r]eally important to the investment community and to our prospect[ive] 

fleet customers.” 

21. Lordstown did not have any formalized policies or procedures to evaluate pre-order 

counterparties.  Lordstown’s sales team, which reported to Burns, was comprised mostly of 

individuals with no sales experience in the automotive industry, and was not given any instructions 

or guidance to determine whether a customer was a commercial fleet.  In addition, Lordstown did 

not have policies or procedures for recording, tracking, or maintaining pre-order data. 

22. After Lordstown announced in August 2020 that it had secured 27,000 pre-orders 

for the Endurance from fleet customers, Lordstown, at Burns’ direction, continued to solicit 

potential fleet customers to assess eventual production capacity and to increase the number of pre-

orders to highlight to potential investors and customers.  Throughout the fall of 2020, Lordstown 

and Burns made numerous public statements touting increasing numbers of pre-orders from fleet 

customers.  On January 11, 2021, Lordstown issued a press release stating it had received 100,000 

pre-orders from commercial fleets, which Burns described as “unprecedented in automotive 

history.” 

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23. On March 12, 2021, however, a third-party research firm, which had taken a short 

position in Lordstown’s stock, published a report that alleged, among other things, that 

Lordstown’s 100,000 pre-orders were largely fictitious and nonbinding, and from customers that 

generally did not even have fleets of vehicles.  Shortly after the report was published, Lordstown’s 

Board of Directors formed a Special Committee to investigate its allegations. 

24. On June 14, 2021, the Special Committee issued a public statement addressing the 

allegations, and stated that certain statements by Lordstown concerning pre-orders were “in certain 

respects, inaccurate.”  The Special Committee determined that, while Lordstown had stated on 

several occasions that its pre-orders were from, or “primarily” from commercial fleets, in fact 

many pre-orders were obtained from (i) fleet management companies or other end users that 

indicated interest in purchasing Endurance trucks, similar to commercial fleets, and (ii) so-called 

“influencers” or other potential strategic partners that committed to attempt to secure pre-orders 

from other entities, but did not intend to purchase Endurance trucks directly.  The Special 

Committee also stated that one entity that provided a large number of pre-orders did not appear to 

have the resources to complete large purchases of trucks.  It also found that other entities provided 

commitments that appeared too vague or infirm to have been appropriately included in the total 

number of pre-orders disclosed by Lordstown. 

Lordstown’s Pre-Orders Were Not All From or Primarily From Fleet Customers 

25. On September 21, 2020, DiamondPeak filed a preliminary proxy statement to 

solicit votes for its merger with Lordstown.  In the proxy statement Lordstown stated it had 

“received pre-orders primarily from fleet operators to purchase over 38,000 Endurance vehicles.”  

In fact, according to the Special Committee’s analysis, pre-orders from intermediaries or 

influencers, and not fleets, comprised over 40% of the 38,000 amount, including pre-orders from 

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8 

customers that Burns and Lordstown reasonably should have understood lacked apparent resources 

or intent to buy large quantities of the Endurance. 

26. On October 26, 2020, the first day of trading for Lordstown’s common stock, Burns 

stated in an interview by The Detroit News that Lordstown had “pre-sold 40,000 of [the 

Endurance] to fleet customers already.”  On November 12, 2020, Lordstown filed a Form S-1, 

signed by Burns, stating it currently had “pre-orders primarily from fleet operators to purchase 

over 44,000 vehicles[.]”  According to the Special Committee’s analysis, 48% of the 40,000 

amount was from intermediaries or influencers. 

27. On November 16, 2020, Lordstown issued a press release stating it had “received 

approximately 50,000 non-binding production reservations from commercial fleets….”  On the 

same date, Burns stated in a capital markets-oriented forum that Lordstown had “50,000 pre-sales 

already, all from fleets.”  On November 17, 2020, Burns stated in an interview by CNBC that 

Lordstown had received “50,000 preorders,” sold to “fleets,” and described the pre-orders as “very 

serious orders.”   Lordstown’s Form S-1/A, signed by Burns and filed on December 1, 2020, stated 

it had “received pre-orders primarily from fleet operators to purchase approximately 50,000 

Endurance vehicles.”  According to the Special Committee’s analysis, however, 50% of the 50,000 

amount was from intermediaries or influencers.  On December 2, 2020, Burns stated in an investor 

conference, “[w]e have 50,000 pre-orders already, well in advance of what we thought we would 

have[,] … almost $3 billion in pre-orders already.”  

28. On December 21, 2020, at Burns’ direction, Lordstown posted on social media and 

filed a Form 8-K stating it had received “80,000 non-binding reservations for the Endurance to 

date.”  Although the statements did not specify whether the pre-orders were from or primarily from 

fleets, they implied that the pre-orders were from or primarily from fleets, consistent with prior 

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9 

statements.  The 80,000 amount also included a pre-order for 5,000 trucks (representing $263 

million in potential revenue) by a customer who later canceled the pre-order due to a 

misunderstanding, but Lordstown’s sales team continued to count it towards the total amount.  

According to the Special Committee’s analysis, 67% of the 80,000 amount at this time was from 

intermediaries or influencers. 

29. On January 11, 2021, Lordstown issued a press release stating that Lordstown “has 

received more than 100,000 non-binding production reservations from commercial fleets….”  The 

press release quoted Burns as saying, “[r]eceiving 100,000 pre-orders from commercial fleets for 

a truck like the Endurance is unprecedented in automotive history….”  According to the Special 

Committee’s analysis, however, by that time 71% of the 100,000 amount was from intermediaries 

or influencers.  The 100,000 amount also included a verbal indication of interest from a customer 

who would agree to an “influencer” memorandum of understanding, which, as Burns knew or 

should have known, was not executed at the time.  This memorandum of understanding was not a 

pre-order agreement or an LOI to buy Lordstown’s Endurance, but rather an understanding “to 

assist Lordstown in generating leads to support the sale of up to 15,000 Endurance trucks by 

December 31, 2023.”  This customer expressly informed Lordstown that it did not have a fleet and 

did not intend to buy any trucks.  In interviews with a research analyst and on media outlets in 

January and February 2021, Burns stated that the 100,000 pre-orders were submitted by “fleets,” 

and described the pre-orders as “sticky.” 

30. Lordstown and Burns’ statements about the increasing numbers of pre-orders from 

27,000 to 100,000 were materially inaccurate.  First, as Burns knew or should have known, the 

pre-orders were not all from or primarily from fleet customers, a market Lordstown had described 

in SEC filings as “commercial or governmental organizations with three or more trucks.”  As the 

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10 

Special Committee found, 40% to 71% of the pre-orders during this period were from 

intermediaries or influencers who indicated they would encourage, facilitate, or influence the 

purchase of the Endurance and did not intend to buy it for their own use.  Second, Burns’ 

statements that the pre-orders were “very serious orders” or “sticky” were inaccurate because 

Burns knew the pre-orders were non-binding and customers were not obligated to purchase any 

trucks.  Third, the pre-orders included large quantities from customers who, as Burns knew or 

should have known, had no apparent ability or intent to buy such quantities of the truck.  As a 

result, Lordstown and Burns, who knew or should have known that certain pre-orders were not 

from or primarily from fleets, inaccurately reflected the true nature of the demand for the 

Endurance. 

CLAIMS FOR RELIEF 

First Claim 

Violations of Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2) 

31. The SEC re-alleges and incorporates by reference paragraphs 1 through 30 as 

though fully set forth herein. 

32. Burns has, by engaging in the conduct set forth above, directly or indirectly, in the 

offer or sale of securities, by use of means or instrumentalities of interstate commerce or of the 

mails, obtained money or property by means of untrue statements of material fact or by omitting 

to state a material fact necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading. 

33. By reason of the foregoing, Burns violated, and unless restrained and enjoined, will 

continue to violate, Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)]. 

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Second Claim 

Violations of Section 17(a)(3) of the Securities Act, 15 U.S.C. § 77q(a)(3) 

34. The SEC re-alleges and incorporates by reference paragraphs 1 through 30 as 

though fully set forth herein. 

35. Burns has, by engaging in the conduct set forth above, directly or indirectly, in the 

offer or sale of securities, by use of means or instrumentalities of interstate commerce or of the 

mails, engaged in transactions, practices, or courses of business which operated or would operate 

as a fraud or deceit upon purchasers of securities. 

36. By reason of the foregoing, Burns violated, and unless restrained and enjoined, will 

continue to violate, Section 17(a)(3) of the Securities Act [15 U.S.C. § 77q(a)(3)]. 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that this Court: 

A. Find that Defendant committed the violations alleged in this Complaint; 

B. Enter an injunction, in a form consistent with Rule 65 of the Federal Rules of Civil 

Procedure, permanently restraining and enjoining Defendant from violating, directly or indirectly, 

the laws Defendant is alleged to have violated in this Complaint; 

C. Order Defendant to pay a civil money penalty pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)];  

D. Issue an order, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u] 

and this Court’s inherent equitable powers, prohibiting Defendant from serving as an officer or 

director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange 

Act, [15 U.S.C. § 78l], or that is required to file reports pursuant to Section 15(d) of the Exchange 

Act [15 U.S.C. § 78o(d)], as appropriate or necessary for the benefit of investors; 

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12 

E. Grant, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u], any 

other equitable relief that may be appropriate or necessary for the benefit of investors; and 

F. Retain jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and 

decrees that may be entered, or to entertain any suitable application or motion for additional relief 

within the jurisdiction of this Court. 

Respectfully submitted, 

 
Date: March 22, 2024.    s/Mark M. Oh      

James M. Carlson (DC Bar No. 981364) 
[email protected] 
202-551-3711 
 
Jeffrey G. Leasure (DC Bar No. 495458) 
[email protected] 
202-551-4407 
 
Suzanne J. Romajas 
[email protected] 
202-551-4473 
 
Peter C. Lallas (DC Bar No. 495944) 
[email protected] 
202-551-6864 
 
Mark M. Oh (DC Bar No. 477310) 
202-551-4436 
[email protected] 
 
U.S. Securities and Exchange Commission 

      100 F Street, N.E. 
      Washington, DC 20549 
       
 Attorneys for Plaintiff  

United States Securities and Exchange Commission 

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