Feds Charge Nikola Founder With Three Counts Of Fraud

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Trevor Milton could wind up behind bars.

Less than a year after an investigative financial report was released by short-seller Hindenburg Research accusing Nikola Motors and its CEO/founder Trevor Milton of purposely engaging in fraud and other deceptive tactics to manipulate public opinion, the US government has now indicted Milton on three counts of criminal fraud.

Per CNBC, the US Attorney's Office in Manhattan convinced a grand jury that the billionaire "targeted individual, non-professional investors - so-called retail investors - by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews." Milton has already surrendered to New York authorities. Nikola went public in June 2020 and Milton held around $8.5 billion in company stock at the peak of its value.

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Shares have since tanked to just $13 a share following Milton's indictment. The grand jury further ordered Milton to forfeit all property "traceable to the commission of said offenses." That'll likely amount to over $1 billion. There was a time when the Nikola Badger, a hopeful Tesla Cybertruck rival, was going to enter series production with the help of General Motors as part of the automaker's $2 billion investment deal. The fallout from Hindenburg's report forced GM to renegotiate the deal.

Milton also resigned from the company, but that didn't get him off the hook. He's now facing two counts of securities fraud and one count of wire fraud. This could result in time behind bars.

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The company, meanwhile, has released a statement re-emphasizing it no longer has any ties to its founder and that it "cooperated with the government throughout the course of its inquiry," adding that it remains committed to "delivering Nikola Tre battery-electric trucks later this year." The company acknowledged earlier this year it discovered in its own internal investigation that Milton made many misleading statements to investors beginning in 2016 through its IPO last summer.

One example of Milton's illegal actions included arranging for a video demonstration in 2018 showcasing Nikola's semi-truck "in motion." The reality was that it was a non-working prototype filmed rolling down a hill after being towed to the top. The video was later edited to make it seem the road was flat.

Source Credits: CNBC

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