Home » Crime and Fraud • US business news » Nikola founder Trevor Milton jailed for defrauding investors

Nikola founder Trevor Milton jailed for defrauding investors

By Nithya Bose in Crime and Fraud, posted December 19, 2023

Nikola founder Trevor Milton has been jailed for four years and fined $1 million for defrauding investors in the electric and hydrogen-powered truck company.

This verdict follows Milton's conviction in October 2022 on two counts of wire fraud and one count of securities fraud.

The sentence is notably less than the 11 years sought by prosecutors but far more than the non-jail sentence proposed by Milton's defense.

Milton was allowed to remain free on bail while appealing the conviction.

He also faces a potential forfeiture of property as part of the sentencing.

Prosecutors expressed concerns over his apparent lack of remorse.

A letter to the judge noted his "profound denial of accountability and insistence on blaming others."

Nikola was once considered a promising player in the electric vehicle industry.

However, it faced a heavy blow when allegations of false and misleading statements emerged.

As a result, the firm's market value plunged.

The company settled civil charges with the US Securities and Exchange Commission (SEC) in 2021, agreeing to pay $125 million.

Milton became an overnight billionaire when Nikola went public through a special purpose acquisition company (SPAC) deal in June 2020.

He stepped down as executive chairman in September 2020 amid an internal probe.

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Prosecutors compared Milton to Elizabeth Holmes, the disgraced founder of Theranos, who faced an 11-year prison term last year for defrauding investors.

They wrote to Judge Edgar Ramos: “Just as Holmes lied about Theranos-manufactured blood analyzers, Milton lied about the operability of the Nikola One semitruck.”

However, Milton’s lawyers argued “that Nikola is still a real business, while Theranos is not,”

The case sheds light on challenges associated with SPAC processes.

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Prosecutors contend that the structure allowed Milton to make misleading statements.

Nikola's Chairman, Stephen Girsky, named CEO in August, faces the ongoing challenge of restoring confidence in the company.

Nikola's stock has steadily declined, trading below $1 with a market value of approximately $296 million.

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