Prosecutors say Trevor Milton lied to investors on multiple occasions until he left the company last year.
On Thursday, a New York federal court unsealed a grand jury indictment against electric startup Nikola’s founder Trevor Milton, on three charges of fraud. The U.S. Attorney’s Office in New York alleged two counts of securities fraud for lying to investors, making false statements about the company and its products, as well as one count of wire fraud. This latest news comes as Milton resigned his position last September, after coming under investigation by the U.S. Securities and Exchange Commission and the Department of Justice.
U.S. Attorney Audrey Strauss said that Milton surrendered to authorities earlier in the day, and will appear make his first appearance in court this afternoon.
The indictment accuses Milton of misleading investors from November 2019 to September 2020. As part of the alleged scheme, prosecutors say he used print media, television, social media and podcasts to target individual, non-professional (or “retail” investors) with materially false claims about its models. Those claims included the “fully functioning” Nikola One semi, which prosecutors allege Milton knew wasn’t operable at the time. Per the indictment, he also misled investors with his claims on the Badger pickup, saying it was built from the “ground up” as an in-house project, when he knew that was not the case.
As a result of the investigation, General Motors pulled out of its former agreement to take a stake in the fledgling Nikola and co-develop some of its powertrain technologies. Nikola shares tumbled at least 10% as the markets opened Thursday morning.