The Nikola founder was found guilty of fraud.
(Photo: AP)
new York The founder of US truck manufacturer Nikola, Trevor Milton, has been found guilty of fraud. That was decided by a federal court in Manhattan on Friday.
Milton, 40, has been convicted of three counts of fraud linked to overly optimistic promises made by Nikola. According to the verdict, he misled the investors in the electric truck start-up. He was acquitted of a more serious charge of securities fraud, but faces up to 20 years in prison.
The unequivocal verdict against Milton, who had pleaded not guilty, came as a surprise. It underlines the efforts of the US Department of Justice to take tougher action against white-collar crime.
“I think the evidence was clear,” the Bloomberg agency quoted a jury as saying. “I haven’t done anything wrong,” Milton defended himself outside the courthouse. He only spoke about Nikolas “business plans.” He will continue to fight. The sentence is to be announced on January 27th.
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“We welcome the attention of the court and the jury in this matter,” said Nikola when asked by the Handelsblatt on Friday evening. “It’s important to remember that this trial concerned statements Mr. Milton made several years ago.” “, questioned. “We at Nikola are excited to close this chapter.”
The trial began on September 13th. Prosecutors argued that Milton tricked retail investors into buying Nikola stock by misrepresenting the company’s products and capabilities in numerous tweets, media interviews and podcasts.
In the sights of the short sellers
It was “one lie after another,” Assistant District Attorney Jordan Estes said in her closing argument Thursday. “His lies may have been circulated on social media, but make no mistake: this was an old-fashioned scam.”
Milton was known in the industry for making great announcements. He described his own technology as “ten to 15 years ahead of the competition”. He promised: “Nikola has found the holy grail of the truck industry.” And he insulted “enviers”, “lying journalists” and “shortys”, ie short sellers. The latter initiated his end.
On September 10, 2020, two days after Nikola announced a partnership with General Motors, short-selling house Hindenburg Research, which was betting on a Nikola stock crash, released a devastating report. Hindenburg is controversial – but the allegations hit the mark.
The core of the criticism were the many U-turns and dubious statements made by Milton. Research by the Financial Times also later confirmed that a truck dubbed the “Nikola One” in a 2017 promotional video simply rolled down a gentle hill instead of driving itself. And that, contrary to Milton’s claims, there were no solar cells on the roof of the Nikola headquarters, confirmed by satellite images. Milton had not responded to a Handelsblatt inquiry about his claims.
A quick change at the top saved Nikola: Ten days after the Hindenburg Report was published, Milton was chased from the farm. In the future, former Opel boss Michael Lohscheller will lead the company.
Former boss Mark Russell told the court he only learned after he joined the company that the first electric truck had neither a natural gas-powered turbine nor a fuel cell when Milton unveiled it.
Milton is still the company’s largest single shareholder. His fortune has dwindled to hundreds of millions of dollars, having climbed into the billions shortly after Nikolas went public in June 2020.
More: Inside Nikola: How the start-up still wants to revolutionize the truck world