Image source: Freight Waves
Trevor Milton, the founder of electric car maker Nikola, was convicted last Friday of fraud for lying to investors.
Milton allegedly lied about the company’s electric and hydrogen fuel cell technology in a case where he was found guilty.
The jury found Nikola’s founder guilty of three counts: one count of securities fraud and two counts of wire fraud.
He was acquitted of another count of securities fraud after the jury deliberated for more than five hours.
Milton could face years in prison.
According to prosecutors, Trevor Milton has made false and misleading statements about almost every aspect of the company.
Among the allegations, Milton claimed that Nikola had a fully functional prototype despite being unusable.
He also claimed that the company was building an electric, hydrogen-powered pickup truck built from scratch with parts and technologies from Nikola.
However, prosecutors felt the allegation was a lie.
After the verdict was delivered, US Attorney Damian Williams released a statement, saying:
“Trevor Milton lied to Nikola’s investors — over and over again. That’s fraud, plain and simple.”
“Let this case serve as a warning to anyone who plays fast and loose with the truth to get investors to part with their money. It won’t end well.”
In 2020, business partners who previously worked with Milton said it was hard to trust.
They also said that Nikola’s founder had a tendency to exaggerate his plans and not keep his promises.
Others doubted his character and his integrity.
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The electric car maker went public in 2020 and surpassed Ford in value despite never having delivered a vehicle.
That year, General Motors announced plans to invest in Nikola and work together to build an electric car.
The company initially had plans to supply the startup with equipment for Nikola’s hydrogen fuel cell trucks.
Signs of trouble
Nikola’s statements surfaced when the company joined several technologies and electric vehicle companies that went public through Special Acquisition Vehicles (SPACs).
Milton was also accused of defrauding a Utah ranch seller.
Based on what Milton said about the company, the ranch owner accepted Nikola stock options as part of the purchase price.
However, the company’s shares fell when a report published alleged that Nikola was an intricate fraud.
The report that put the company in the spotlight was Hindenburg Research, a short-seller that makes money by betting against companies.
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Trevor Milton was indicted in July 2021.
General Motors gave up its ownership stake in Nikola and canceled plans to produce the Badger, the company’s pickup truck.
Milton called the criticism of Nikola a “hit job” and said the contents were lies.
He subsequently resigned as Nikola’s president in September 2020.
Since then, the company’s shares have fallen by around 95%, a far cry from their June 2020 peak.
In 2021, Nikola Miltons confirmed seven inaccurate company progress statements from July 2016 to July 2020.
Last year, the company agreed to pay the Securities and Exchange Commission $125 million to settle charges of investor fraud against Nikola.