Nikola NKLA founder Trevor Milton found guilty of fraud

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 docket Friday of three of 4 counts of fraud regarding false statements he made to drive up the worth of Nikola’s inventory.

Milton was charged with two counts of securities fraud and two counts of wire fraud, all associated to statements he made about Nikola’s enterprise whereas he was chairman and CEO of the corporate. Jurors found him guilty on one depend of securities fraud and each of the wire fraud counts.

Milton shall be sentenced on Jan. 27. He confronted as much as 25 years in jail if convicted on all 4 counts.

“Trevor Milton lied to Nikola’s investors — over and over and over again. That’s fraud, plain and simple,” mentioned Damien Williams, the U.S. Attorney for the Southern District of New York. Williams mentioned that the case towards Milton ought to “serve as a warning” to others who make misrepresentations to traders.

“It won’t end well,” he mentioned.

WIlliams’ workplace in Manhattan had alleged that Milton lied about “nearly all aspects of the business” he based in 2014 throughout his time main the corporate. Those lies, prosecutors mentioned, have been meant to induce traders to bid up the value of Nikola’s inventory.

“On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight,” Assistant U.S. Attorney Nicolas Roos mentioned in his opening assertion in September.

Nikola’s inventory value briefly surged to over $90 per share in June 2020, simply days after it went public by way of a merger with a particular goal acquisition firm. For a brief interval, Nikola — an organization with no income — was extra invaluable than century-old Ford Motor.

That formidable valuation did not final. Nikola’s shares fell sharply as soon as Milton was pressured out of the corporate in September 2020, after the corporate’s board of administrators found that some of the fraud allegations made by short-seller Hindenburg Research had advantage.

The U.S. Department of Justice and the Securities and Exchange Commission each opened investigations within the months following Milton’s departure. In July 2021, a grand jury indicted Milton on three counts of fraud; a fourth depend was added in June 2022.

Nikola itself wasn’t going through costs on this case. The SEC had introduced associated civil costs towards the corporate final yr. Those costs have been settled in December after Nikola agreed to pay a $125 million nice. Although Milton nonetheless owns Nikola inventory, the corporate had in any other case lower ties with him.

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