Prosecutors allege prototypes were cobbled together, used wall plugs and gravity to “run”
Two counts of securities fraud and one of wire fraud in charges
Nikola Motors founder Trevor Milton has been charged with three counts of fraud by a federal grand jury in the U.S. The U.S. Attorney for Manhattan has accused the former exec, who resigned as chair last year, of two counts of securities fraud as well as wire fraud related to his actions and boosting the stock price of the electric truck startup.
“This is a very straightforward case, Milton told lies to generate popular demand for Nikola stock, Beginning at least in or about March 2020, when Nikola announced that its stock would become publicly listed, Milton became increasingly preoccupied with keeping Nikola’s stock price high,” U.S. Attorney Audrey Strauss told reporters at a press briefing Thursday (via CNBC).
According to the indictment, “Milton’s scheme targeted individual, non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews.”
Prosecutors allege that prototypes of the Nikola One semi and Badger pickup were not made from parts the company had fully manufactured and developed but instead were cobbled together using components taken from other vehicles. They were allegedly towed into position for events and powered by wall plugs. To give the appearance of driving, the indictment said one truck was towed to the top of a hill and filmed as it rolled down the hill.
Milton’s legal team disputes the accusations. The team issued a statement that said “Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.” The team also said that “this has been an investigation in search of a crime. Justice was not served by the government’s action today, but it will be when Mr. Milton is exonerated.”
The allegations have yet to be tested in court, but they seem to have been enough to stop the planned partnership between GM and Nikola.