The founder and former boss of the electric vehicle manufacturer Nikola, Trevor Milton (39), has to answer for fraud in court. The New York District Attorney’s 49-page indictment includes three charges of fraud. Plaintiffs include investors who claim they lost a lot of money because of false information about the publicly traded company’s products.
Milton pleaded not guilty at the court hearing. He is currently on bail of $ 100 million. The indictment marks a steep decline for the entrepreneur who founded the Phoenix-based Nikola in 2014 and was its CEO until June last year when Nikola went public after merging with a special takeover company (Spac).
These lightning IPOs, especially by electric vehicle start-ups, have been heavily criticized in the past. Prosecutors and the US Securities and Exchange Commission are also investigating the manufacturer of electric pickups Lordstown Motors, which went public in October 2020. Also at Lordstown, the conditions of the IPO and the information on vehicle pre-orders are the subject of the investigation. Lordstown’s chief executive officer and chief financial officer left the company in June.
Since its inception, a Milton Nikola team has been working on alternative drive technologies for trucks and large SUVs. In the future, these should run on the basis of electric batteries and hydrogen fuel cells. The start-up also worked on charging stations for hydrogen trucks. However, the plans remained largely theoretical.
Prosecutor: “False and misleading allegations”
Audrey Strauss, a Manhattan attorney, said Milton “shamelessly and repeatedly used social media, television, podcast and press appearances and interviews to make false and misleading claims about the status of Nikola’s trucks from November 2019 to September last year and setting up technology “.
According to Thursday, Milton is accused, among other things, of having announced that Nikola had built a “fully functional” semi-trailer truck prototype – but at the same time Milton knew very well that it was “not operational”. With his statements, he specifically wanted to encourage investors to buy shares, according to the allegation.
“Trevor is innocent,” replied Milton’s lawyer Marc Mukasey. “There was no fraud. We are ready to fight this case in court.” The Nikola company itself was not charged. The company said in a statement that it is partnering with the government and focusing on delivering battery-powered trucks this year.
Share crashed – but Milton is still said to be a billionaire
Before Milton’s resignation, the investment company Hindenburg Research had accused Nikola of “complex fraud” based on numerous lies by the founder. Business partners would be “misled” by the startup with the “false claim that they have important technologies”, it said, among other things. Investors have lost “tens of thousands and sometimes even hundreds of thousands of dollars” through Milton’s fraud, the indictment goes on to say.
Milton stepped down as Nikola’s executive chairman shortly thereafter, last September. Although Nikola’s share price has fallen more than 85 percent since its June 2020 peak, Milton still has $ 1.2 billion in net worth, according to Forbes magazine on Thursday.