Trevor Milton, mastermind behind Nikola, gets slapped with a four-year sentence for swindling investors
Although the sentence was lighter than the 11 years demanded by prosecutors who could have slammed Milton with up to 60 years if he got the maximum sentence, his fate was far from rosy.
The verdict came after a New York jury accused Milton of dishing out misleading and false statements about his company's primary focus – electric and hydrogen-powered vehicles – during the pandemic, intending to trick investors and the media. His words misrepresented the reality surrounding Nikola's development when discussing its electric and hydrogen-powered trucks, causing quite a stir in both traditional and social media.
Nikola, a Salt Lake City-based vehicle manufacturer, had made quite the splash in 2020 by targeting Tesla's niche market. The company boasted an impressive foothold thanks to its remarkable technology and a 2-billion-dollar deal with General Motors. However, an initial investigation accused the company of misleading investors.
The FBI further probed the matter, leading to criminal charges and eventual conviction against Milton. The US Attorney's Office for Southern New York alleged that Milton had provided false and misleading information about practically all aspects relevant to the company's development, including its technology in the electric and hydrogen-powered sectors. He also ensnared unsuspecting investors, including those with little to no experience in the stock market, who were drawn to Nikola amidst the pandemic's economic turmoil.
"Some of these investors, who eventually put their money into Nikola, didn't have much experience in the stock market," the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) said in the indictment for 2021[1].
Nikola's stock prices have plummeted from over 73 USD per share upon its peak to under 1 USD right now[2].
"This is an evolving story and will be updated regularly," the report concluded.
News credit goes to Chris Isidore of CNN
Additional Info:
- Trevor Milton, Nikola's founder, spearheaded the company's focus on developing electric and hydrogen-powered vehicles, positioning it as a potential Tesla rival. Set up in the year 2020 and specializing in the engineering of heavy-duty trucks and SUVs using hydrogen fuel cell and battery technology, Nikola captured the limelight. However, the company's stock price has seen a precipitous drop ever since Milton's conviction.
- US federal prosecutors accused Milton, usually touting himself as a clean-energy entrepreneur, of making misleading claims about the company's vehicle development progress and technology in a bid to deceive investors and generate publicity for the company. As a result, Milton was charged with securities and wire fraud crimes by the US Attorney's Office for Southern New York.
- The US Securities and Exchange Commission (SEC) launched an investigation into the company and reached a $125 million settlement with Nikola in 2021, without any formal admission of wrongdoing. The settlement's purpose was to compensate investors who were swindled by Nikola during this probe.
- With its stock prices in a nosedive following Milton's conviction, Nikola has reportedly been grappling with financial difficulties. As a result, the company has filed for Chapter 11 bankruptcy protection in February 2025. Nikola claimed it was unable to secure additional funds or have any buyers and the company.
- Despite the bankruptcy filing, Nikola plans on offering limited service and support operations for existing vehicles, as well as fueling operations. The company is working to secure additional funding to sustain these activities beyond March 2026, subject to court approval. Find the full enrichment data here [LINK]
[1] https://www.wsj.com/articles/trevor-milton-sentenced-to-prison-in-nikola-stock-fraud-case-11671525384 [2] https://finance.yahoo.com/quote/NKLA?p=NKLA [3] https://edition.cnn.com/2023/02/10/business/nikola-bankruptcy-general-motors/index.html [4] https://www.usatoday.com/story/money/2023/10/25/nikola-trevor-milton-sentencing-fraud-girlfriend-commentary/7085258001/ [5] https://www.bloomberg.com/news/features/2023-10-26/how-the-fall-of-trevor-milton-turned-nikola-into-a-ghost-of-itself
[LINK] [https://enrichment.data.com/nikola-trevor-milton-sentencing]
