A class-action civil lawsuit has been filed in the U.S. District Court alleging security fraud violations against Lordstown Motors Corporation, and three of its executives.

A complaint filed on Thursday by stockholder Matthew Rico names LMC, CEO Steve Burns, President Rich Schmidt, and Chief Financial Officer Julio Rodriquez as defendants, alleging violations of the Security and Exchange Act.

The complaint says LMC repeatedly mentioned pre-order agreements with prospective customers, claiming that it was “on track” to begin production of the all-electric Lordstown Endurance in September 2021.

Citing the March 12, Hindenburg Research report alleging fake orders, production hurdles and a fire that destroyed a prototype of the Endurance, the complaint notes that Lordstown common stock fell 16.5% in one day, representing hundreds of millions of dollars in lost market capitalization.

The complaint also cites LMC CEO Steve Burns’ admission during a conference call on Wednesday that the company had received an inquiry from the SEC but failed to disclose the SEC probe in the filing of its yearly and quarterly report.

The complaint states that RIDE shares fell another 9% in aftermarket trading late Wednesday.

Alleging false and misleading statements regarding the Company’s business, the complaint states that LMC failed to disclose that its “purported” orders were non-binding; that many of the “customers” lacked the means to make such purchases; that LMC has not been “on track” to begin production this coming September; and that the first test run of the Endurance led to the vehicle bursting into flames within ten minutes.

The complaint alleges that Matthew Rico acquired and held shares of Lordstown at artificially inflated prices and has been damaged by the revelation of the Company’s alleged “misrepresentations” and “omissions.”

The suit claims LMC violated SEC regulations “ in that they employed devices, schemes, and artifices to defraud; made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and engaged in acts, practices, and a course of business which operated as a fraud and deceit upon those who purchased or otherwise acquired the Company’s securities during the class period.”

The lawsuit says shareholders paid artificially inflated prices for LMC shares that would not have purchased if they had been aware “that the market prices had been artificially and falsely inflated by Defendants’ misleading Statements”.

The suit asks the court to declare the complaint a class action, allowing other shareholders to join, and award unspecified compensatory and punitive damages for anyone who purchased or otherwise acquired Lordstown securities between August 3, 2020, and March 17, 2021.

The lawsuit does not say how many shareholders could be eligible to join, saying that there are so many that an estimate is impracticable.

Attorney Drew Legando of the Cleveland law firm of Merriman, Legando, Williams & Klang seeks a trial by jury.

LMC had not filed a response to the complaint as of Thursday afternoon.  21 News has reached out to the public relations firm representing LMC.  As of 3:45 p.m. Thursday there has been no response to our email.