SEC Charges Nikola Founder Trevor Milton With Fraud

The complaint further alleges that Milton ultimately reaped tens of millions of dollars in personal benefits as a result of his misconduct.

The Securities and Exchange Commission today announced charges against Trevor R. Milton, the founder, former CEO and former executive chairman of Nikola Corporation, “for repeatedly disseminating false and misleading information – typically by speaking directly to investors through social media – about Nikola’s products and technological accomplishments.”

The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Milton founded Nikola in 2015 with the primary goal of manufacturing trucks that run on alternative fuels with low or zero emissions, and building an alternative fuel station infrastructure to support those vehicles. Milton allegedly helped Nikola raise more than $1 billion in private offerings and go public through a business combination conducted by a special purpose acquisition company (SPAC). (GM Signs MoU with Nikola to Supply Hydrotec Fuel Cells; Nikola and General Motors Partner! Nikola Badger Truck to be Engineered and Manufactured by GM)

According to the SEC’s complaint, during that time and after Nikola was publicly traded, Milton acted as Nikola’s primary spokesperson appearing regularly on national media and communicating directly with investors through social media. Milton allegedly encouraged investors to follow him on social media to get “accurate information” about the company “faster than anywhere else.”

Instead, however, Milton allegedly used his extensive media platform to repeatedly mislead investors about, among other things, Nikola’s technological advancements, products, in-house production capabilities, and commercial achievements. The complaint further alleges that Milton ultimately reaped tens of millions of dollars in personal benefits as a result of his misconduct.