U.S. says Nikola founder indicted for misleading investors

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NEW YORK — Trevor Milton, the founder of electric truck maker Nikola Corp., has been indicted on charges of making false and misleading statements to investors, the U.S. Department of Justice said on Thursday.

The indictment said that, from November 2019 to September 2020, Milton schemed to defraud investors into buying Nikola shares through statements about the company’s product and technology development.

Milton resigned in September 2020.

The company released a statement in response to the indictment:

“Trevor Milton resigned from Nikola on September 20, 2020, and has not been involved in the company’s operations or communications since that time. Today’s government actions are against Mr. Milton individually, and not against the company.

“Nikola has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities.”

Last September, Hindenburg Research said in a paper that it was short-selling Nikola stock and labeled the company a “fraud” — a charge it denied.

In November, Nikola said it received grand jury subpoenas related to the matter.

In February, Nikola disclosed, following a review by an outside law firm, that both it and Milton had made several statements that were partially or completely inaccurate.

Among the false and misleading statements Milton made, according to the indictment:

  • That the company had a “fully functioning” semi-truck prototype known as the “Nikola One,” despite the fact that Milton knew that the prototype was inoperable.
  • That Nikola had engineered and built an electric- and hydrogen-powered pickup truck known as “the Badger”  from the “ground up” using Nikola’s parts and technology, which he knew was not true.
  • That Nikola was producing hydrogen and was doing so at a reduced cost, when “no hydrogen was being produced at all by Nikola, at any cost.”
  • That Nikola had developed batteries and other important components in-house, when they were buying them from third parties.
  • That reservations for Nikola’s semi-trucks were binding orders representing billions in revenue, when they were actually able to be canceled at any time “and were for a truck Nikola had no intent to produce in the near-term.”

Lawyers for Milton didn’t immediately respond to an email seeking comment. Prosecutors have scheduled an 11 a.m. press conference on the matter in N.Y.

Shares in Nikola plunged 7.5 percent in premarket trading on Thursday.

Reuters, Bloomberg and Automotive News staff contributed to this report.

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