Trevor Milton, the founder, and former chairman and CEO of electric heavy truck maker Nikola was found guilty on Friday. Three out of four counts of fraud were charged. It is related to the false statement he made to drive up the value of the company stock. Jurors found him guilty of one count of securities fraud and both of the wire fraud counts.
Milton will be sentenced on Jan. 27. He faced up to 25 years in prison if convicted on all four counts. The US Attorney for the Southern District of New York, Damien Williams said, “Trevor Milton lied to Nikola’s investors — over and over and over again. That’s a fraud, plain and simple.” Williams said that the case against Milton should “serve as a warning” to others who make misrepresentations to investors.
Williams’ office in Manhattan had alleged that Milton lied about “nearly all aspects of the business” he founded in 2014 during his time leading the company. Those lies, prosecutors said, were intended to induce investors to bid up the price of Nikola’s stock. “On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight,” Assistant U.S. Attorney Nicolas Roos said in his opening statement in September.
Nikola’s stock price briefly surged to over $90 per share in June 2020, just days after it went public via a merger with a special purpose acquisition company. For a short period, Nikola — a company with no revenue — was more valuable than century-old Ford Motor. That ambitious valuation didn’t last. Nikola’s shares fell sharply once Milton was forced out of the company in September 2020, after the company’s board of directors found that some of the fraud allegations made by short-seller Hindenburg Research had merit.
The U.S. Department of Justice and the Securities and Exchange Commission both opened investigations in the months following Milton’s departure. In July 2021, a grand jury indicted Milton on three counts of fraud; a fourth count was added in June 2022. Nikola wasn’t facing charges in this case. The SEC brought related civil charges against the company last year. Those charges were settled in December after Nikola agreed to pay a $125 million fine. Although Milton still owns Nikola’s stock, the company had otherwise cut ties with him. Over the past year, at various times the talks have been changing and impacting the company as well due to the ongoing case. Now as the verdict comes out, it is time for the company to start new. However, it remains unclear how many would support the company.