Trevor Milton updates
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Nikola founder Trevor Milton has been charged by US federal prosecutors with making false statements to investors, as part of their investigation into the electric truck start-up.
The US attorney’s office in Manhattan on Thursday accused Milton, who stepped down as chair of Nikola last year, of defrauding investors into buying shares in the company “through false and misleading statements”.
Federal prosecutors allege Milton targeted retail investors by speaking directly to them via social media, television, print and podcast interviews, according to the indictment. It said that many of these investors had no prior experience in trading and were buying stocks to supplement lost income from the pandemic or to pass time while in lockdown.
“The value of Nikola’s stock, including stock held by retail investors, plummeted after certain of Milton’s statements were revealed to be false and misleading,” the indictment said.
“As a result, some of the retail investors that Milton’s fraudulent scheme targeted suffered tens and even hundreds of thousands of dollars in losses, including, in certain cases, the loss of their retirement savings or funds that they had borrowed to invest in Nikola.”
Nikola became a public company in June last year through a merger with VectoIQ Acquisition, a blank-cheque company set up by former General Motors executive Stephen Girsky.
Its stock price shot up to as much as $80 following its public debut before plummeting on the release of a short seller report by Hindenburg Research, which alleged the company was an “intricate fraud”. An internal investigation by the company found that nine of Milton’s statements were wholly or partly “inaccurate”.
A spokesperson for Milton said a statement would be issued shortly.
A spokeswoman for Nikola said that Milton resigned September 20 “and has not been involved in the company’s operations or communications since that time. Today’s government actions are against Mr Milton individually, and not against the company. Nikola has co-operated with the government throughout the course of its inquiry.”
The company said it still planned to deliver Nikola Tre battery-electric trucks later this year.