Benzinga - by Anan Ashraf, Benzinga Editor.
Prosecutors are reportedly seeking an 11-year prison sentence for Trevor Milton, the convicted founder of Nikola Corp (NASDAQ:NKLA).
What Happened: Milton is set to be sentenced on Dec. 18, and prosecutors are advocating for a substantial sentence in line with the recommendation from the probation department, as reported by Reuters. The probation department has proposed the jail term for Milton, accusing him of defrauding investors of the EV truck maker with false claims.
In October 2022, a federal jury in Manhattan found Milton guilty of two counts of wire fraud and one count of securities fraud. The prosecution portrayed Milton as a “con man,” alleging that he misled investors about the technology of the electric and hydrogen-powered truck maker since 2019.
Counter Arguments: On the founder’s side, Milton’s lawyers are proposing probation instead of imprisonment, asserting that there was no malicious intent in Milton’s statements. They argued that any false statements were a result of Milton’s unwavering faith in his Phoenix-based company.
Milton’s legal team sought to distinguish his case from that of Theranos founder Elizabeth Holmes, claiming that Nikola is a real company with real products, unlike Theranos, which was promoted as a breakthrough health technology company without a successful product. They further suggested that Holmes’ lies posed a risk to people’s health, a distinction not applicable in Milton’s case.
Milton founded Nikola in 2015, and the company’s market capitalization, which soared to over $30 billion in June 2020, now stands at $830.6 million.
Price Action: Nikola shares closed up 4.3% at 72 cents on Tuesday but were down nearly 1% in after-hours trading, according to data from Benzinga Pro.
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