Trevor Milton CEO of Nikola
Massimo Pinca | Reuters
Trevor Milton, the founder and former chairman and CEO of electrical heavy truck maker Nikola, was found guilty in federal court on Friday of three of 4 counts of fraud regarding false statements he made to drive up the worth of Nikola’s stock.
Milton was charged with two counts of securities fraud and two counts of wire fraud, all related to statements he made about Nikola’s business while he was chairman and CEO of the corporate. Jurors found him guilty on one count of securities fraud and each of the wire fraud counts.
Milton faced as much as 25 years in prison if convicted on all 4 counts.
The U.S. Attorney’s Office in Manhattan had alleged that Milton lied about “nearly all facets of the business” he founded in 2014 during his time leading the corporate. Those lies, prosecutors said, were intended to induce investors to bid up the value of Nikola’s stock.
“On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight,” Assistant U.S. Attorney Nicolas Roos said in his opening statement in September.
Nikola’s stock price briefly surged to over $90 per share in June 2020, just days after it went public via a merger with a special-purpose acquisition company. For a brief period, Nikola – an organization with no revenue – was more precious than century-old Ford Motor.
That ambitious valuation didn’t last. Nikola’s shares fell sharply once Milton was forced out of the corporate in September 2020, after the corporate’s board of directors found that a few of the fraud allegations made by short-seller Hindenburg Research had merit.
The U.S. Department of Justice and the Securities and Exchange Commission each opened investigations within the months following Milton’s departure. In July of 2021, a grand jury indicted Milton on three counts of fraud; a fourth count was added in June of 2022.
Nikola itself wasn’t facing charges on this case. The SEC had brought related civil charges against the corporate last 12 months. Those charges were settled in December after Nikola agreed to pay a $125 million wonderful. Although Milton still owns Nikola stock, the corporate had otherwise cut ties with him.
