Electric truck manufacturer Nikola announced Tuesday it had settled fraud charges with the Securities and Exchange Commission (SEC), agreeing to pay the regulator $125 million.
The settlement is in response to allegations by the SEC that Nikola’s founder and former chief executive Trevor Milton misled investors about Nikola’s products and technological progress in order to boost the company’s share price. The SEC alleged that Milton misrepresented the anticipated costs and sources of electricity for its truck venture.
Milton was indicted by the Department of Justice in July on fraud charges, to which he pleaded not guilty. (RELATED: Twitter Offers $800 Million To Settle Class Action Lawsuit Over Claims It Misled Investors)
The headquarters of the US Securities and Exchange Commission (SEC) is seen in Washington, DC, January 28, 2021. (Photo by SAUL LOEB/AFP via Getty Images)
“We are pleased to bring this chapter to a close as the company has now resolved all government investigations,” Nikola said in a press release. “We will continue to execute on our strategy and vision to deliver on our business plan, including delivering trucks to customers, expanding our manufacturing facilities and our sales and service network, and building out our hydrogen infrastructure ecosystem including hydrogen production, distribution and dispensing stations.”
Milton took Nikola public through a special purpose acquisition company (SPAC) in June 2020. The company was initially valued at $12 billion, making Milton a billionaire in the process.
“As the order finds, Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” Gurbir S. Grewal, director of the SEC’s enforcement division, said in a statement.
“This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides,” Grewal said.
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