By Michael Elkins
Nikola (NASDAQ:NKLA) founder and former Chairman, Trevor Milton was found guilty on three out of four counts of fraud on Friday, related to false statements he made to drive up the value of the company stock. Jurors found him guilty of one count of securities fraud and both wire fraud counts after deliberating for roughly five hours.
Milton is scheduled to be sentenced on January 27th and faces up to 25 years in prison.
The US Attorney for the Southern District of New York, Damian Williams said, “Trevor Milton lied to Nikola’s investors — over and over and over again. That’s a fraud, plain and simple.” Williams said that the case against Milton should “serve as a warning” to others who make misrepresentations to investors.
Nikola went public in 2020, and briefly surpassed Ford (NYSE:F) in value that year despite never having delivered a vehicle. General Motors (NYSE:GM) even announced in 2020 that it planned to invest in Nikola and work together on an electric truck. But Nikola’s stock fell sharply after a report by Hindenburg Research alleged the company was an “intricate fraud.”
Milton called the report a “hit job” and “lies”. However, the CEO resigned from his position as chairman and the stock has fallen roughly 95% off its high in June of 2020. The company acknowledged in 2021 seven “inaccurate” statements from Milton about the company’s progress made from July 2016 to July 2020 and agreed to pay the Securities and Exchange Commission $125 million to settle charges.
Shares of NKLA are up 0.65% in pre-market trading on Monday.