The inventor of Nikola Motor, a manufacturer of electric semitrucks, is on trial for fraud related to claims he made about the technology and goods of the business, claims that federal prosecutors claim were overstated and deceptive.
Trevor Milton, who launched Nikola in 2014, is accused by the U.S. Attorney’s Office in Manhattan of lying about “virtually all facets of the firm” while serving as the company’s chairman and CEO. Prosecutors claimed in indictments announced in 2021 and earlier this year that those lies were told in an effort to increase stock sales for the firm. Milton has refuted the allegations.
“He lied to dupe innocent investors into buying his company’s stock,” In his opening remarks, Assistant U.S. Attorney Nicolas Roos stated that the U.S. District Court on Tuesday in New York. “On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight.”
Jury selection started on Monday, and the trial officially started on Tuesday. Potential jurors were informed by the prosecution that the trial would probably run around five weeks.
The trial brings to an end Nikola’s astounding ascent and fall under Milton.
Days after going public through a merger with a special-purpose acquisition company in June 2020, the company’s stock price momentarily soared to more than $90 per share (SPAC). The stock boom increased Nikola’s value above Ford Motor, which at the time didn’t yet have any revenue.
However, once Milton was fired from the company in September of that year as a result of fraud claims brought by short-seller Hindenburg Research, its shares dropped significantly. the U.S. Securities and Exchange Commission, and After Milton left, the Department of Justice started an investigation; in July 2021, a grand jury indicted him on three counts of fraud. In June, the prosecution added a fourth count.
On Tuesday, Nikola’s shares reached a closing price of $5.03.
Two counts of securities fraud and two counts of wire fraud are being brought against Milton in connection with remarks he made regarding Nikola’s firm while serving as the company’s chairman and CEO. He may spend up to 25 years in federal prison if found guilty.
According to Milton’s lawyer, Marc Mukasey, the company did not want to deceive investors but rather to present a vision for the future of transportation. According to Mukasey, the defense intends to claim that Milton’s remarks were approved by other Nikola executives, including the company’s chief counsel.
In this situation, Nikola is not being prosecuted. Last year, the SEC filed related civil accusations against the business; however, the case was resolved in December when Nikola agreed to pay a $125 million penalty. Despite the fact that Milton still owns Nikola stock, the business has severed all relations with its creator.
What Milton is accused of is as follows:
The prosecution claims that Milton participated in a “scheme” designed to persuade retail investors to purchase Nikola shares by making “false and misleading statements regarding Nikola’s product and technology development.” Authorities claim:
Milton claimed that the Nikola One, the company’s first semitruck prototype, was “fully functional,” but it wasn’t.
The prototype truck, which couldn’t drive on its own, was rolled down a slope to produce a film that appeared to show it moving under its own power.
Milton asserted independently that Nikola spent years developing an electric pickup truck design and construction known as the Badger. However, according to the prosecution, Milton’s earliest assertions about the Badger were little more than “concept sketches and renderings.”
The exhibition truck was really produced by outside vendors and was based on a truck from a major carmaker, despite the fact that the business eventually displayed a prototype Badger.
Milton also informed investors that Nikola had secured firm orders for its electric vehicles, totaling “billions in income,” and that Nikola was manufacturing hydrogen gas—the fuel required to refill its fuel-cell-powered trucks—at a lower cost. Prosecutors claim all of the claims were untrue.
Milton is also accused of providing the seller of the ranch he bought in 2020 with similar false information in an effort to persuade the seller to take Nikola stock as partial payment for the acquisition.
Jurors are anticipated to hear the prosecution’s complete case against Milton on Wednesday.