Nikola founder found guilty of fraud
The jury found Milton guilty of one count of securities fraud and two counts of wire fraud after deliberating for about five hours. Milton was acquitted of an additional count of securities fraud.
During the trial in Manhattan federal court, prosecutors portrayed Milton, 40, as a “con man” who sought to mislead investors on the maker’s technology for electric and hydrogen-powered trucks from November 2019.
Milton, of Oakley, Utah, was indicted in July 2021. He left Nikola in September 2020 after a report by short seller Hindenburg Research called the company a “fraud”.
Prosecutors accused Milton of using social media and television interviews, podcasts and printouts to make false and misleading statements about Nikola’s trucks and technology.
They said Milton’s inappropriate statements included that Nikola had built a electric– and a hydrogen-powered “Badger” pick-up from “the base”, developed batteries in-house that he knew he was buying elsewhere and soon succeeded in creating a “Nikola One” semi-trailer of which he knew it wasn’t working.
Milton’s statements about Nikola came as the company joined the growing number of technology and electric vehicle companies going public through special purpose acquisition vehicles or SPACs. He was also accused of defrauding the seller of a Utah ranch, who accepted Nikola’s stock options as part of the purchase price based on Milton’s claims about the ‘company.
The defense and prosecution presented closing arguments to the jury on Thursday in a trial that began on September 13. The prosecution said Milton was obsessed with the company’s stock price and made statements to inflate it and his own net worth.
The defense said prosecutors misrepresented Milton’s statements about Nikola’s plans to shake up the auto industry.
Nikola said in a statement after Milton’s sentencing that he was “pleased to close this chapter” and said he would continue to work to create value for shareholders.
The company agreed last year to pay $125 million to settle with the U.S. Securities and Exchange Commission over its representations to investors.