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Nikola Founder Trevor Milton Charged With Securities Fraud

  • July 29, 2021

Federal prosecutors and securities regulators started investigating Nikola last fall around the time an investment firm put out a report questioning its products and some of Mr. Milton’s claims. That firm, Hindenburg Research, said the company had put out a promotional video to suggest it had a working prototype — but never disclosed the truck was moving forward only because it was rolling down a hill in neutral gear. Mr. Milton resigned a few weeks later.

Nikola went public in June 2020 in a $700 million merger with a special purpose acquisition company, or SPAC, called VectorIQ. SPACs are blank-check companies that raise money from investors in the hopes of finding a company with an existing business to buy.

Federal prosecutors contend that retail investors were hurt by the stock’s sharp drop, which started last summer, but not early investors in the company, including Mr. Milton. Nikola’s shares were trading at about $14 Thursday morning, after falling from more than $65 in the middle of last year, a point at which the company had a valuation in excess of Ford Motor’s.

Nikola said in a statement that Mr. Milton had not been involved with the company since resigning in September 2020. “Today’s government actions are against Mr. Milton individually, and not against the company. Nikola has cooperated with the government throughout the course of its inquiry,” the company said.

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