Hydrogen truckmaker Hyzon Motors and two of its former executives yesterday (Tuesday) settled a fraud case brought against them by financial regulators in the US by agreeing to pay out multi-million dollar and hundred-thousand dollar sums respectively to close the case.

The Securities and Exchange Commission (SEC) had charged the company and the two former executives — former chief executive Craig Knight and former managing director of Hyzon’s European subsidiary Max Holthausen — with misleading their investors with alleged false statements about sales volumes of Hyzon’s fuel cell electric vehicles (FCEV).

The SEC complaint alleged that they had “misrepresented the status of its business dealings with potential customers and suppliers to crease the false appearance that significant sales transaction were imminent”.

Without admitting or denying the allegations, Hyzon has agreed to pay civil penalties of $25m, while Knight and Holthausen have agreed to pay $100,000 and $200,000 respectively. The pair have also not admitted or denied the SEC’s allegations.

Central to the SEC’s complaint is the charge that Hyzon falsely stated that it had delivered its first hydrogen truck in July 2021 — even going so far as to post a video of the vehicle implying that it was running on hydrogen when it was not equipped to do so.

It goes on to accuse Hyzon of falsely reporting that it had sold 87 FCEVs in 2021 when in fact it had sold none that year.

“Transparency in the form of full, fair, and accurate disclosure is fundamental to the federal securities laws,” said Jason Burt, regional director of the SEC’s Denver Regional Office. “The defendants allegedly violated this principle by misleading investors about virtually every aspect of Hyzon’s business. The terms of today’s settlement, if approved by the court, will hold Hyzon and responsible individuals accountable for their misconduct.”

Knight is alleged in the SEC’s complaint to have been responsible for the false statements about Hyzon’s customer and supplier relationships, while Holthausen — head of the eponymous Netherlands-based company whose stake in Hyzon’s European subsidiary was ultimately bought out by Hyzon at a massive premium — was accused by the SEC of being responsible for false statements about the delivery of its first FCEV and other certain FCEV sales claims.

Both have agreed that they are barred from serving as officers or directors of a publicly-traded company, for five years in Knight’s case, and ten in Holthausen’s.

In addition, Knight has returned $252,000 to Hyzon, which he was paid out in bonuses during the twelve-month period the SEC alleges the fraud took place. Mark Knight, the company’s former chief financial officer, has handed back $122,500 — although the SEC did not accuse him of misconduct.

“Hyzon is pleased to put this chapter behind us, and continue our disciplined execution of operational milestones including commercial vehicle deployments and fuel cell technology developments,” said Hyzon Motors' current chief executive Parker Meeks. “With a strengthened Board of Directors and leadership team, a streamlined product offering, and a rationalised geographic footprint, we look forward to accelerating the hydrogen industry.”

The settlement is dependent on court approval.