Nikola founder Trevor Milton was convicted on Friday by a US jury of fraud on charges of lying to investors about the company’s electric fuel cell and hydrogen technology.
The jury found Milton guilty of one count of securities fraud and two counts of wire fraud after deliberating for approximately five hours. Milton was acquitted of securities fraud.
Prosecutors alleged that Milton made false and misleading statements about “virtually every aspect of the business,” including that Nikola had a fully functioning prototype despite Milton’s knowledge that it was inoperable. Milton also said Nikola built an electric and hydrogen pickup from the ground up with Nikola parts and technology, although he did not, according to prosecutors.
“Trevor Milton lied to Nikola’s investors, over and over again. That’s fraud, plain and simple,” US Attorney Damian Williams he said in a post-judgment document. “Let this case serve as a warning to anyone who plays fast and loose with the truth to get investors to part with their money. It won’t end well.”
The Nikola was launched in 2020 and briefly surpassed Ford in value that year despite never delivering a vehicle. General Motors announced in 2020 that it would invest in Nikola and work together on an electric truck. GM also planned to supply the startup with equipment for hydrogen fuel cell trucks.
Milton’s comments about Nikola came as he joined a growing number of tech and electric companies through special purpose acquisition vehicles, or SPACs. He was also accused of defrauding a Utah ranch salesman who accepted Nikola stock options as part of the purchase price based on Milton’s claims about the company.
But Nikola’s shares fell sharply after a scathing report accused the company of being an “elaborate fraud”. The report was published by Hindenburg Research, a short-seller that makes profitable bets against companies.
Milton, Oakley, Utah, was indicted in July 2021.
GM later divested itself of its stake in Nikola and ended plans to produce its own pickup truck, the Badger.
Milton, who called the report criticizing Nikola a “successful job” and a “lie”, stepped down as president of Nikola in September 2020.
Shares of Nikola are down roughly 95% since their peak in June 2020. The company acknowledged in 2021 seven “specific” statements from Milton about progress made between July 2016 and July 2020.
Last year Nikolas agreed to pay $125 million to the Securities and Exchange Commission to settle charges that he defrauded investors.