Founder Nikola accused of fraud

Trevor Milton, the founder and chairman of electric car maker Nikola, has been charged with two counts of securities fraud and one count of telegraph fraud. According to the report, Milton was making false statements about almost every aspect of his business to boost Nikola’s share price.

According to the indictment, Milton deceived the development of Nikola’s electric vehicle into a far more smooth process than it actually was. In addition, the video Nikola produced for the advertisement appeared to be an electric truck Nikola One running on its own, but it was actually a fake video of running downhill with external power.

The electric parts mounted on the truck use an external power source rather than a battery loaded on the truck, and they are roughly placed on the gearbox side without fuel cells or hydrogen tanks, and the vehicle height adjustment has not been completed. In addition, the dashboard touch screen used in the truck is said to be a commercially available one. After all, nothing was connected to this vehicle system.

In addition, Milton said Nikola electric vehicle reservations have reached billions to tens of billions of dollars, and it is an important electric vehicle that has developed a breakthrough battery technology that can provide hydrogen needed for hydrogen fuel cell vehicles at a quarter of the market price using its own supply chain. Some of the parts were developed and produced in-house, so the cost of owning a Nikola truck would be 20 to 30 percent cheaper than a regular diesel engine.

Prosecutors revealed that Milton was soliciting investments by misleading investors with this information, mainly for individual investors. Nikola’s stock assets reached a record high of $8.5 billion. The indictment believes that all of the above offenses should result in the surrender of all traceable assets, possibly including the $1 billion Nikola earned when he went public in June 2020.

The SEC has demanded that the district court of the indictment confiscate Milton’s fraudulent profits and pay a reasonable fine. It also requires that Milton be banned for the rest of his life from becoming executives in companies that issue securities. Related information can be found here.