The founder of electric semitruck maker Nikola Motor (NASDAQ:NKLA) is standing trial on fraud charges related to statements he made about the company’s technology and products, statements that federal prosecutors allege were exaggerated and misleading.
The U.S. Attorney’s Office in Manhattan has alleged that Trevor Milton, who founded Nikola in 2014, lied about “nearly all aspects of the business” during his time as chairman and CEO of the company. Those lies were intended to bolster sales of the startup’s stock, prosecutors alleged in indictments released in 2021 and earlier this year.
The trial caps a stunning rise and fall of Nikola under Milton.
The company’s stock price briefly surged to more than $90 per share in June 2020, days after it went public via a merger with a special-purpose acquisition company (SPAC). The stock run-up made Nikola – a company that didn’t yet have revenue at the time – more valuable than Ford Motor (NYSE:F).
But its shares fell sharply after Milton was forced out of the company in September of that year, following fraud allegations made by short-seller Hindenburg Research. Both the Securities and Exchange Commission and the U.S. Department of Justice opened investigations following Milton’s departure; he was indicted on three counts of fraud by a grand jury in July 2021. Prosecutors added a fourth count in June.
If convicted, he could face up to 25 years in federal prison.
NKLA shares acquired 18 cents, or 3.6%, to $5.21.
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