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The billionaire who resigned as CEO of the company last year was charged with criminal charges on Thursday.
Billionaire founder and former CEO of Nikola Corp Trevor Milton was criminally charged on Thursday for defrauding investors and lying to investors about the manufacturer of electric and hydrogen-powered trucks.
Milton, 39, pleaded not guilty to two counts of securities fraud and one count of wire fraud at a hearing in Manhattan Federal Court, accusing him of publishing Nikola’s products and technologies between November 2019 and September 2020 The statement.
Authorities said Milton relied on social media posts and public relations blitzs from TV and podcast interviews to push up Nicholas’s stock price, becoming one of the 100 richest people in the world, and “upgrading” his status as an entrepreneur.
“Milton lied about almost every aspect of the business,” U.S. Attorney Audrey Strauss in Manhattan said at a news conference. “The criminal charge against Milton today is where rubber meets the road.”
A judge allowed Milton to waive a $100 million bond, partly guaranteed by two homes owned by residents of Oakley, Utah.
The maximum sentence for each crime is 20 or 25 years. The US Securities and Exchange Commission filed a related civil lawsuit.
“Trevor is innocent,” Milton’s lawyer Mark Mukashi said in an email. “There is no fraud. We are ready to fight this case in trial.”
Nikolai was not charged. It said in a statement that it worked with the government to focus on delivering Tre battery electric trucks this year.
In the afternoon trading, Nicolas shares fell by 1.43 US dollars, or 10.1%, to 12.76 US dollars after falling to 12.60 US dollars.
Be wary of short sellers
These allegations marked the downfall of Milton, who founded Phoenix-based Nicolas in 2014 and served as its CEO until June 2020, when the company was merging with a special purpose acquisition company (SPAC) After listing.
Milton resigned as executive chairman of Nicolas in September last year. Two weeks ago, the short-seller Hindenburg Research Company marked the company as “fraud” and stated that the company made many misleading statements about its technology.
The prosecutor said that Milton’s improper statements included that Nicolas manufactured an electric and hydrogen-powered “badger” pickup truck from “scratch”, internally developed a battery he knew was purchased elsewhere, and successfully manufactured it at an early stage. “Nicholas”. He knew that a” semi-truck would not work.
Strauss said that the closest thing to driving the Nikola One is the company’s engineers pushing the prototype down the hill in order to shoot the commercials.
The indictment stated that Milton also focused on keeping Nicolas’ stock price high.
It stated that on March 2, 2020, the day before Nicholas revealed that he would be listed, Milton emailed a board member, stating that “(we) need to ensure that retail investors stand On our side. This is what prevents stocks from selling short. This is very important to me.”
The US Securities and Exchange Commission stated that Milton’s goal is ordinary investors, which he calls “Robinhood (Nasdaq: HOOD) investors”, portraying himself as a “different” type of CEO, and creating Sex companies are outspoken.
“Company officials cannot say anything they want to say on social media without considering the federal securities laws,” said Gubir Greval, the chief enforcement officer of the US Securities and Exchange Commission, in a news conference.
Prosecutors said that shortly after the news about the badger was announced, Milton’s Nikolai shares were worth at least $8.5 billion.
“Forbes” magazine said on Thursday that even though Nicolas’s share price has fallen by more than 85% from its June 2020 peak, Milton is still worth $1.2 billion.
Tesla (NASDAQ: TSLA) is one of Nikola’s competitors in the field of electric trucks.
Both companies are named after Nikola Tesla, an inventor who worked on electricity, and Tesla CEO Elon Musk is now one of the richest people in the world.
In 2018, Musk and Tesla each agreed to pay a civil fine of $20 million to resolve the SEC’s allegations against Musk’s tweets.
Accountability
Nicholas initially denied Hindenburg’s allegations, but said in February that an external law firm’s review found that Milton and the company’s statements were partially or completely wrong.
Hindenburg founder Nathan Anderson (Nathan Anderson) said in a statement: “We applaud the expedient measures taken by regulators to protect investors and hold Milton accountable for his shocking lies.”
Two days after General Motors (NYSE: GM) agreed to supply batteries, chassis architecture, fuel cell systems, and a factory for Badger pickup trucks, Hindenburg released its report in exchange for an 11% stake in Nikola and 700 million Dollar.
The two companies re-established this relationship in November last year, cancelled the equity and planned to build trucks.
Former General Motors Vice Chairman Stephen Gilski was responsible for managing the SPAC that merged with Nikola, replacing Milton as the chairman of Nikola.
Compared with IPOs, SPACs are a faster way to get private companies to go public.
But critics said that this process is prone to conflicts of interest and crude due diligence, and the US authorities have stepped up their scrutiny of SPACs.
Prosecutors and the SEC are also investigating Lordstown Motors Corp, a manufacturer of electric pickup trucks that went public in October last year, regarding its SPAC terms and its statement regarding vehicle reservations.
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