Fourth investor lawsuit filed against Lordstown Motors

A fourth investor has filed a class-action civil lawsuit against Lordstown Motors Corporation alleging fraud.
Lawyers representing Jesse Brury of Mecklenburg County, North Carolina filed a complaint in U.S. District Court on Thursday claiming LMC and three executives made false and misleading statements regarding the company’s business.
The lawsuit claims LMC CEO Steve Burns, President Rich Schmidt, and Chief Financial officer Julio Rodriguez failed to disclose that pre-orders for the company’s all-electric Endurance pickup truck were non-binding and that many of its customers lacked the means to buy the trucks.
In addition to questioning LMC’s assertion that it is on track to begin production in September, the complaint notes that the first test run of the Endurance led to the vehicle bursting into flames within ten minutes.
Like the previous three complaints filed since last month, Brury’s lawsuit is expected to become part of a class action that would allow other investors to join in questioning whether Lordstown Motors violated the Securities and Exchange act.
Other investors suing LMC include Sulayman Zuod, of Norfolk County, Massachusetts, and Matthew Rico of Oshawa, Ontario, Canada.
Since Feb 11 when LMC's RIDE stock was selling for $31.57, shares have declined, closing at $12.32 on Thursday.
An annual report filed with the SEC by Lordstown Motors states that on February 17, 2021, LMC received a request from the SEC for the voluntary production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles.
LMC CEO Steve Burns did not reveal the SEC request to members of the news media until one month later during a March 17 conference call with members of the press and investors.
There was also no mention of the SEC probe in LMC’s fourth quarter and year-end financial report that was filed on the day of the conference call.
That omission was mentioned in one of two lawsuits filed by investors alleging securities violations by LMC.
The company says it will “vigorously defend” against the claims made in the lawsuits, which LMC expects will be consolidated in U.S. District Court.
LMC says in the Annual Report that it is responding to the SEC’s requests and intend to cooperate with the inquiry.
On March 31, Lordstown Motors unveiled its Beta prototypes of the Endurance which will undergo government-mandated testing.
The company announced earlier that it expected to have 1,500 employees by the end of 2021.
21 News has emailed the company handling public relations for Lordstown Motors seeking a reaction to this latest civil complaint and waiting for a response.