Electric vehicle startup Nikola settles with US for $125M
Electric and hydrogenpowered truck startup Nikola has agreed to a $125 million settlement over charges that it defrauded investors after misleading them about its products, technical advances, and financial prospects.
Nikola Corp. violated the antifraud and disclosure control provisions of the federal securities laws, the Securities and Exchange Commission said Tuesday.
In July the founder and one-time chair of Nikola, Trevor Milton, was freed on $100 million bail after pleading not guilty to charges alleging he lied about the company.
The U.S. Attorney’s Office in Manhattan charged Milton, 39, with two counts of securities fraud and wire fraud. He resigned as chairman in September.
The SEC said in its order that Milton embarked on a public relations campaign aimed at inflating and maintaining Nikola’s stock price before the company had produced a vehicle.
The SEC also found that Milton misled investors about Nikola’s technological advancements, inhouse production capabilities, hydrogen production, truck reservations and orders, and financial outlook. In addition, it found that Nikola misled investors by misrepresenting or omitting information about the refueling time of its prototype vehicles, as well as the economic risks and benefits associated of a potential partnership with General Motors.
Nikola also went public through something called a special purpose acquisitions company, or SPAC, a vehicle that is getting increased scrutiny from the SEC and other regulators. The SEC issued new accounting guidance for SPACs this year after a flurry of them hit the market.