Nikola Motor Company founder Trevor Milton is out of jail on $100 million in bail after pleading not guilty to criminal fraud charges on July 29.
Milton, 39, is accused of making false and deceptive statements about his hydrogen-fueled trucking company to drive investor demand in Nikola stock. The U.S. Attorney’s Office in Manhattan charged him with one count of wire fraud and two counts of securities fraud.
“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,” U.S. Attorney Audrey Strauss said in a statement. “But today’s 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.”
SEC files complaint against Trevor Milton
On July 29, the SEC also filed a civil complaint against Milton for repeatedly making false and misleading statements about core aspects of Nikola’s products and accomplishments to attract investors. Between November 2019 and September 2020, Milton sold a version of Nikola as a trail-blazing company and not the early-stage company it actually was, the SEC complaint states.
“Before Nikola had produced a single commercial product or had any revenues from truck or fuel sales, Milton embarked on a relentless public relations blitz aimed at a class of investors he called ‘Robinhood investors,’” the SEC complaint reads. “Milton’s statements in tweets and media appearances, individually and taken together, painted a picture of Nikola that diverged widely from its then-current reality.”
Nikola Motor (NKLA) started trading on Nasdaq on June 4, 2020, after merging with a SPAC. On the first day of trading, the share prices climbed as much as 5 percent. As the company’s biggest shareholder, Milton’s stake jumped to about $3.7 billion by the end of trading that day, Forbes reported.
The SEC and the Department of Justice started looking into Milton after the investment research firm Hindenburg Research stated that Nikola, the so-called “Tesla of trucking,” was an “intricate fraud.”
Trevor Milton has the net worth to pay bail.
Milton, who founded Nikola in 2014, has a net worth of $1.2 billion, according to Forbes. He paid his bail amount using two properties he owns in Utah that have a combined worth of $40 million, Forbes reports.
Milton is innocent and wrongly accused, his legal team said in a statement released on July 30.
“Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses,” Milton’s legal team states. “This is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.”
Nikola distances itself from Trevor Milton
Officials at Nikola tried to distance themselves from Milton, who resigned from the company in September 2020. He hasn’t been involved in the company’s operation or communications since that time, the company stated.
As part of Milton’s departure from Nikola, he had to give up about 4.9 million shares valued at $166 million, but he was allowed to keep 91.6 million shares worth over $3.1 billion, CNBC reported in September.