NIKOLA TRUCK SLAP
$125M SEC fine
Trendy electric-truck maker Nikola agreed Tuesday to pay the Securities and Exchange Commission $125 million to settle charges it misled investors.
The SEC claimed the company and founder and exCEO Trevor Milton (inset), lied about their products, suggesting they were “fully operational,” by, among other things, sharing a video of a prototype rolling down a hill.
The misleading publicity campaign helped Nikola boost its stock price even though the company had not yet taken in a single dollar in revenue, according to the SEC.
“Before Nikola had produced a single commercial product or had any revenues from truck or hydrogen-fuel sales, Milton embarked on a public-relations campaign aimed at inflating and maintaining Nikola’s stock price,” the SEC said in a Tuesday letter. “Milton misled investors about, among other things, Nikola’s technological advancements, in-house production capabilities, reservation book and financial outlook.”
The $125 million settlement, which Nikola told investors last month it was negotiating, does not involve the electric-truck maker admitting or denying wrongdoing. Milton, who resigned from Nikola in September 2020, was separately charged with federal securities and wire-fraud charges this July and has pleaded not guilty.
‘Milton told lies’
“This is a very straightforward case. Milton told lies to generate popular demand for Nikola stock,” then-Manhattan US Attorney Audrey Strauss told reporters in July.
Nikola has told investors it will seek reimbursement for the settlement from Milton. The settlement will be paid in $25 million installments every six months, with the first payment due within two weeks, said the SEC.
Nikola did not immediately respond to a request for comment, and Milton could not be reached.
The company first went public through a SPAC deal in the summer of 2020, with its shares rising as high as $65 based on what the SEC claims were Milton’s misleading statements. It has since tanked below $10. In addition to electric trucks, Nikola says it’s working on hydrogen fuel-cell technology.