Nikola Founder Trevor Milton Convicted Of Fraud
Nikola Corp (NASDAQ:NKLA) founder Trevor Milton was convicted of fraud over allegations that he lied to its investors about the company's technical achievements.
What Happened: A federal jury convicted Milton of one count of securities fraud and two counts of wire fraud. He may now face a maximum prison sentence of 20 years.
Sentencing for Milton was set for Jan. 27.
During the trial, the jury depicted Milton as a "con man" who sought to deceive investors about the electric- and hydrogen-powered truck maker's technology starting in November 2019.
Milton was indicted on fraud charges in July 2021 and resigned as CEO amid allegations.
According to the court filings, Milton was using social media and interviews on television to make false and misleading claims about Nikola's trucks and technology.
Milton made false statements that Nikola built an electric- and hydrogen-powered Badger pickup from the "ground up" and developed batteries in-house, which he knew were purchased elsewhere, the report said.
He made those statements about Nikola as it joined the mounting number of tech and EV companies going public through SPACs.
About Nikola and Trevor Milton: Milton founded Nikola in 2015. The company was listed on Nasdaq in 2020 by merging with a SPAC called VectoIQ Acquisition Corporation.
Milton owns a 10% stake in the company, more than 51 million shares of Nikola, while his spouse owns an additional 1.25 million shares.
According to Benzinga's Insider Trades page, Milton has sold large portions of his Nikola shares, including more than $16 million in August 2021, $11.7 million in November 2021 and $3.3 million in December 2021.
Nikola reported second-quarter financial results in August with revenue of $18.13 million beating Street estimates.
Last week, the company completed the exchange offer to acquire Romeo Power's (NYSE:RMO) common stock. Nikola intends to proceed with the acquisition of Romeo, in which a newly formed subsidiary of Nikola will be merged into Romeo.
Photo: Trevor Milton, former chairman and CEO of Nikola Corporation. Photo by Miljøstiftelsen ZERO / Flickr Creative Commons