Nikola CEO Trevor Milton
Massimo Pinka | Reuters
Trevor Milton, founder and former chairman and CEO of electric heavy-duty truck maker Nikola, was found guilty in federal court on three of four counts of fraud on Friday. Related to false statements he made to push up the value of Nikola stock.
Milton is 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 Nikola Corporation. A jury found him guilty of one count of securities fraud and two counts of wire fraud.
If convicted on four counts, Milton faces up to 25 years in prison.
The U.S. Attorney’s Office in Manhattan alleges that Milton lied about “almost every aspect of the business” he founded in 2014 while leading the company. Prosecutors said the lies were designed to lure investors into raising the price of Nikola’s stock.
“He became a billionaire almost overnight with the backing of innocent investors deceived by his lies,” Assistant U.S. Attorney Nicholas Ross said in his opening statement in September.
Nikola’s stock briefly surged above $90 a share in June 2020, just days after it went public through a merger with a special purpose acquisition company. In a short period of time, Nikola, a company with no revenue, was more valuable than a century-old Ford.
That ambitious valuation didn’t last. In September 2020, Nikola’s stock price fell sharply after it was forced out of the company in September 2020 after the company’s board found that some fraud allegations made by short-seller Hindenburg Research were substantiated.
Both the Justice Department and the Securities and Exchange Commission launched investigations within months of Milton’s departure. In July 2021, a grand jury indicted Milton on three counts of fraud; a fourth count was added in June 2022.
In this case, Nikolai himself does not face charges. The SEC brought related civil charges against the company last year. The charges were settled in December after Nikola agreed to pay a $125 million fine. Although Milton still holds shares in Nikola, the company has severed ties with him.