New York Daily News
Charged over hyping shady eco-truck startup that burned investors
The founder of an electric and hydrogen-powered truck startup was charged Thursday with lying about “nearly all aspects” of his business, causing millions of dollars in losses for amateur investors.
Trevor Milton, 39, first touted major breakthroughs in the development of Nikola’s eco-friendly long-haul trucks at a 2016 event. He said the truck “fully functions and works, which is really incredible.”
In reality, prosecutors say, the prototype lacked gears, motors and a control system. A video released in 2018 showed the truck traveling on a flat road. But the truck, dubbed Nikola One, was allegedly towed to the top of a hill, where a driver released the brakes.
Milton (photo) also promoted an electric pickup truck, The
Badger, as engineered and built from “the ground up.” But the prototype was made using Ford F-150 pickup trucks, prosecutors charged.
“As alleged, Trevor Milton brazenly and repeatedly used social media, and appearances and interviews on television, podcasts, and in print, to make false and misleading claims about the status of Nikola’s trucks and technology ... criminal charges against Milton are where the rubber meets the road, and he now will be held accountable for his allegedly false and misleading statements to investors,” Manhattan U.S. Attorney Audrey Strauss said.
The videos helped make Nikola a popular investment during the pandemic, when many novice investors used apps to venture into day trading. Some of Nikola’s “retail investors” suffered as much as hundreds of thousands of dollars in losses, according to an indictment.
As the amateur investors poured money into Nikola, sophisticated institutional investors cashed out for a significant profit, the feds say. Once Milton’s statements came into question in September 2020, the value of the company plummeted.
Milton pleaded not guilty in Manhattan Federal Court and was released on $100 million bail, which was secured by two Utah properties, including one valued at $36 million.
“This is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified,” a spokesman for Milton’s legal team said.