Nikola founder Trevor Milton faces new federal fraud charge tied to ranch purchase

Nikola founder Trevor Milton faces new federal fraud charge tied to ranch purchase

US Nikola CEO and founder Trevor Milton speaks during the unveiling of its new all-electric and hydrogen fuel cell battery trucks in partnership with CNH Industrial, at an event in Turin, Italy, on December 2, 2019. .

Massimo Pinca | Reuters

The founder of electric truck startup Nikola Motors, already charged with fraud, faces a new charge related to buying a ranch in Utah, a purchase he paid for in part with an option to buy Nikola stock.

Federal prosecutors in the Southern District of New York on Wednesday charged Trevor Milton with a new wire fraud charge for misrepresenting the status of Nikola’s business to convince the Wasatch Creek Ranch seller to accept an option to buy Nikola stock as payment. partial by the ranch around April 2020.

The new charge is the fourth federal charge against Milton. In July 2021, a federal grand jury indicted Milton on three counts of criminal fraud for allegedly lying about “almost every aspect of the business” to boost sales of the electric vehicle company’s stock.

The option to buy Nikola stock would have allowed the ranch’s seller, Peter Hicks, to buy more than 500,000 shares of the company at what was then a discounted price of $16.50 per share.

Nikola’s stock price briefly rose above $60 in June 2020, but fell sharply after Milton was forced to leave the company amid fraud allegations in September of that year. Shares of the company were trading at $5.60 on Wednesday night.

Milton’s attorneys did not immediately respond to a request for comment.

Prosecutors said Milton built an intricate scheme designed to boost the company’s stock for his own gain by lying about Nikola’s products, technology and future sales prospects. He is accused of using Nikola’s deal to go public through a special purpose acquisition company to target amateur retail investors, some of whom lost hundreds of thousands of dollars.

In his civil suit against Milton, Hicks alleged that Milton made similar statements to convince him to accept the stock option as payment for the ranch.

Many of the allegations about Milton’s allegedly false and misleading statements were first uncovered by Hindenburg Research, a short seller.

Milton, who is still awaiting trial, has maintained his innocence. He pleaded not guilty to criminal charges in a New York court last year.

However, following an internal investigation, Nikola said in February that it found that Milton made several inaccurate statements from 2016 through the company’s initial public offering that misled investors in June 2020.

In December, Nikola agreed to pay the Securities and Exchange Commission $125 million to settle charges of defrauding investors by misleading them about its products, technical ability and business prospects.

Nikola was the catalyst for electric vehicle startups going public through SPAC deals. Investor interest in such companies soared after Tesla shares soared to make it the world’s most valued automaker by market capitalization in 2020.

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