Nikola founder Trevor Milton convicted of defrauding investors in e-truck startu...
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Nikola CEO Trevor Milton,
Nikola founder Trevor Milton convicted of defrauding investors in e-truck startup
Nikola (NKLA) founder Trevor Milton was found guilty of three counts of criminal fraud on Friday in a case accusing him of spreading lies about the electric truck startup for his own personal benefit.
A federal jury in Manhattan found Milton, 40, guilty of two counts of wire fraud and one count of securities fraud, with the top charge carrying a prison sentence of up to 25 years, according to Bloomberg and other news reports. Milton pleaded not guilty to all of the government’s charges.
Nikola gained notoriety in September 2020, when short seller Hindenburg Research alleged that the company had spun up an "ocean of lies" to deceive investors. Memorably, Hindenburg accused Nikola of releasing a deceptive video making it seem as if its Nikola One semi-truck were traveling under its own power at a high rate of speed when, in fact, it was just rolling down a hill.
Milton resigned from the company days after the Hindenburg report, and in July 2021, Manhattan prosecutors charged him with defrauding investors to drive up the value of his company's stock. Prosecutors say Milton lied about the capabilities of Nikola's trucks and fueling infrastructure between November 2019 and the month he stepped down.
Nikola, founded in 2015, made its public debut on June 4, 2020, through a merger with VectoIQ Acquisition Corp (VTIQ), a special acquisition company formed by former General Motors (GM) employees.
Prosecutors said Milton promoted the misleading video of the Nikola One semi-truck to make it appear as if it could drive on its own propulsion. He's also accused of lying about the existence of hydrogen fuel manufacturing and fueling facilities, as well as deceiving investors about the costs of hydrogen production. Milton also allegedly made false statements about its Badger pickup truck, truck orders, and battery technology.
Milton tapped social media platforms including Twitter (TWTR) and YouTube (GOOG, GOOGL) to spread his lies, prosecutors said. That drummed up support for the company’s stock — especially from retail investors, according to prosecutors.
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