Trevor Milton was convicted on one count of securities fraud and two counts of wire fraud.
The founder of EV startup Nikola has faced a spectacular downfall over the past several months, culminating in an imminent prison sentence after a New York jury handed down its decision Friday. Milton, 40, founded the company back in 2014, with the promise of revolutionizing the automotive industry. With a vision of building commercial trucks as well as consumer EVs, prosecutors argued he enticed retail investors with false statements about Nikola’s upcoming vehicles. Most notably, the Nikola One semi-truck.
“His lies may have been on social media, but make no mistake: This was an old-fashioned fraud,” said Assistant US Attorney Jordan Estes, as reported by Bloomberg. When it went public through a special purpose acquisition company (or SPAC), Nikola was valued at $34 billion. Major Wall Street investors poured money into the fledging startup, though its fortunes markedly changed as Milton faced greater scrutiny over claims he made while at the helm of the company.
Milton’s attorneys called the prosecutors’ case “prosecution by distortion,” saying that Milton never intended to deceive investors. During the trial, which began on September 13, the government called a dozen witnesses to testify against Nikola’s former CEO and executive chairman. Those witnesses included Paul Lackey, a Nikola contractor who provided his allegations of fraud and pertinent information to Hindenburg Research, in exchange for a cut of the firm’s profits from shorting Nikola stock.
Hindenburg subsequently released a September 2020 report calling Nikola’s efforts an “intricate fraud”. The EV company’s shares have since plummeted from a high point of $64 a share in June 2020 to just $3.06 a share today.
When he’s sentenced, Milton could face several years in prison.