LORDSTOWN – Lordstown Motors Corp. is facing another class action lawsuit against investors alleging – like the previous two – the company misled investors regarding pre-orders for its battery-powered truck, the Endurance.
The company’s founder / CEO Steve Burns is also named in the latest lawsuit brought by investor Sulayman Zuod. Rich Schmidt, President; Julio Rodriguez, Chief Financial Officer; and Michael Fabian, director of punching operations.
It is also alleged that they were part of a program to fool the stock market and, through their behavior, resulted in the price of Lordstown Motors stock being artificially increased, causing several top managers, including Schmidt and Rodriguez, made it possible to make an enormous amount of money selling her personal shares.
And those investors who bought shares at the inflated price suffered significant financial losses when the company’s RIDE shares began to fall, the lawsuit said.
“Defendants’ fraudulent system and business practices, believed to be fraudulent or deceitful for buyers of Lordstown common stock, have been a success,” the lawsuit said for deceiving the investing public about the prospects of the company and the company’s common stock Artificially Bloated Some executives sold $ 27 million of their own shares “at fraudulent prices,” causing Zuod and others to buy stocks at the bloated price.
The lawsuit alleges that between December 11 and February 3, Schmidt sold 263,412 shares valued at $ 6.3 million and Rodriguez sold 9,300 shares valued at $ 251,000.
David Hamamoto, director and past president of DiamondPeak Holdings Corp., a special-purpose acquisition company that merged with Lordstown Motors on October 22, sold 1 million shares for $ 16.3 million on the same day. He is not a defendant in the lawsuit.
The merger is also the subject of an investigation by the US Securities and Exchange Commission.
An email requesting comment has been sent to a Lordstown Motors spokesman regarding the latest lawsuit.
The two previous lawsuits were merged into one last week.
The latest lawsuit says class time will begin on August 3, when Lordstown Motors announced the proposed merger with DiamondPeak Holdings in New York. In a press release, the company said it had more than 27,000 pre-orders for the truck, representing more than $ 1.4 billion in revenue, mostly from fleet customers.
It also includes other examples of pre-order announcements and statements related to the Company and Burns’ numbers claiming that when the business was announced, the company “never had firm commitments to any less legally binding contract for any of the pre-orders and many of the Customers were touted during the pre-order process The lesson, which ended on March 24, “was a mock operation unable to make purchases of any kind,” the lawsuit states.
The claims are similar to those made in a biting short seller report on March 12th by Hindenburg Research of New York City. It is alleged that Lordstown Motors misled its investors about pre-orders and production plans for its battery-powered truck. The report also characterized the company as a mirage.
Last week Lordstown Motors publicly unveiled the first two beta prototypes of the Endurance. The company announced in March that after making the first prototypes, it plans to produce one a day for the next two months. The betas are used for crash, engineering and validation tests.
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