A Manhattan jury on Friday found Nikola Corp. founder Trevor Milton guilty of illegally inflating the stock value of his hydrogen and electric truck startup, concluding a trial that lasted almost exactly one month.
Milton was charged last July with disseminating false and misleading information about the company's products and technological accomplishments, which caused the company's stock price and valuation to soar last year, and was facing two counts of securities fraud and two counts of wire fraud. Jurors found him guilty on one count of securities fraud and both of the wire fraud counts.
The charges, levied by the Securities and Exchange Commission (SEC), accused Milton of "repeatedly disseminating false and misleading information – typically by speaking directly to investors through social media."
Milton's fall from grace has been nearly as spectral as his sudden rise.
Milton founded Nikola in 2015 with the goal of manufacturing trucks that run on alternative fuels – namely hydrogen – with low or zero emissions, and building an alternative fuel station infrastructure to support those vehicles. Milton 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).
Milton in September 2020 stepped down as executive chairman of his Phoenix, Arizona-based hydrogen-electric upstart amid a firestorm of criticism sparked by stock short-seller Hindenburg Research, which released a report calling Nikola an “intricate fraud built on dozens of lies over the course of its founder and executive chairman Trevor Milton,” and claimed to have evidence, including recorded phone calls, text messages, emails and more detailing alleged false statements by Milton.
According to the SEC’s complaint, 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," the SEC charged.