Manhattan, New York — Trevor Milton, founder and former executive chairman of electric car-maker Nikola, was charged with three counts of fraud for lying about “nearly all aspects of the business” to persuade investors into buying shares, according to an indictment unsealed Thursday.
The U.S. Attorney’s Office in Manhattan charged Milton with two counts of securities fraud and one count of wire fraud on Thursday over statements made from November 2019 to September 2020 about the company’s products, technological advancements and commercial prospects.
Prosecutors said Milton engaged in this fraudulent behaviour so he could inflate the company’s stock price, as well as to “elevate his stature as an entrepreneur.”
“Before Nikola had produced a single commercial product or had any revenues from truck or fuel sales, Milton embarked on a relentless public relations blitz aimed at a class of investors he called ‘Robinhood investors,'” the SEC wrote in its complaint. “From approximately November 2019 to September 2020, Milton’s statements in tweets and media appearances, individually and taken together, painted a picture of Nikola that diverged widely from its then-current reality.”
Prosectors are targeting six misleading statement made by Milton , some of which include: claiming that Nikola’s first semi-truck prototype, the Nikola One, could be driven under its own power, which he knew could not; he had significantly developed or already developed the prototype for the Badger, an electric pick-up truck; and falsely claiming that Nikola had obtained “billions and billions and billions and billions” of dollars of committed truck orders.
Milton stepped down as Nikola’s executive chairman last September, just two weeks after Hindenburg Research called the company a fraud.
Nikola itself, however, was not charged and said in a statement it has cooperated with the government throughout its inquiry. Adding that Milton has not been involved in company operations since he resigned in September.
Nikola says its currently staying focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities.