U.S. charges Nikola founder Trevor Milton with lying to investors

Reuters2021-07-30

NEW YORK (Reuters) -Trevor Milton, the billionaire founder and former chief executive of Nikola Corp, was criminally charged on Thursday with defrauding investors by lying to them about the electric- ...

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ItsRileyReid
2021-07-30
ItsRileyReid
Ok
Kitsonlin
2021-07-30
Kitsonlin
Nice
keh086k
2021-07-30
keh086k
Ok
- Kitsonlin:
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Yuenyee
2021-07-30
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- keh086k:
  Ok
土金水木火
2021-07-30
土金水木火
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The U.S. Securities and Exchange Commission filed related civil charges.\n“Trevor is innocent,” Milton’s lawyer Marc Mukasey said in an email. “There was no fraud. We’re ready to fight this case at trial.”\nNikola was not charged. It said in a statement it cooperated with the government and is focused on delivering Tre battery-electric trucks this year.\nIn afternoon trading, Nikola shares were down $1.43, or 10.1%, to $12.76, after falling as low as $12.60.\nWARY OF SHORT-SELLERS\nThe charges mark a steep downfall for Milton, who founded Phoenix-based Nikola in 2014 and was its CEO until June 2020, when it went public after merging with a special-purpose acquisition company, or SPAC.\nMilton stepped down as Nikola’s executive chairman last September, two weeks after short-seller Hindenburg Research labeled the company a “fraud” and said it made many misleading statements about its technology.\nProsecutors said Milton’s improper statements included that Nikola had built an electric- and hydrogen-powered “Badger” pickup from the “ground up,” developed batteries in-house that he knew it was purchasing elsewhere, and had early success in creating a “Nikola One” semi-truck he knew did not work.\nStrauss said the closest the Nikola One ever came to driving was when company engineers rolled a prototype down a hill so it could be filmed for a commercial.\nThe indictment said Milton also became preoccupied with keeping Nikola’s stock price high.\nIt said that on March 2, 2020, the day before Nikola revealed it would go public, Milton emailed a board member that “(we) need to make sure we are getting retail investors on our side. That is what prevents the stock short selling. This is super important to me.”\nThe SEC said Milton targeted ordinary investors he called “Robinhood investors,” portraying himself as a “different” type of CEO who would be forthright about his trailblazing company.\n“Corporate officers cannot say whatever they want on social media without regard for the federal securities laws,” SEC enforcement chief Gurbir Grewal said at the news conference.\nProsecutors said Milton’s Nikola stake was worth at least $8.5 billion soon after the announcements regarding the Badger.\nAlthough Nikola’s share price has fallen more than 85% from its June 2020 peak, Milton is still worth $1.2 billion, Forbes magazine said on Thursday.\nTesla Inc is among Nikola’s rivals in the electric truck sector.\nBoth companies’ names derive from Nikola Tesla, an inventor whose work included electric power, and Tesla CEO Elon Musk is now among the world’s richest people.\nIn 2018, Musk and Tesla each agreed to pay $20 million in civil fines to settle SEC charges over a Musk tweet.\nACCOUNTABILITY\nNikola initially denied Hindenburg’s accusations, but in February said a review by an outside law firm uncovered statements by Milton and the company that were partially or completely wrong.\n“We commend regulators for acting expediently to protect investors and hold Milton accountable for his egregious lies,” Hindenburg founder Nathan Anderson said in a statement.\nHindenburg issued its report two days after General Motors Co agreed to supply batteries, chassis architecture, fuel cell systems and a factory for the Badger pickup, in exchange for an 11% Nikola stake and $700 million.\nThe companies reworked that relationship last November, eliminating the equity stake and plans to build the truck.\nStephen Girsky, a former GM vice chairman who ran the SPAC that merged with Nikola, replaced Milton as Nikola’s chairman.\nSPACs are a faster way than initial public offerings to take private companies public.\nBut critics say the process is prone to conflicts of interest and shoddy due diligence, and U.S. authorities have stepped up their scrutiny of SPACs.\nProsecutors and the SEC are also investigating electric pickup truck maker Lordstown Motors Corp, which went public last October, about the terms of its SPAC and its statements about vehicle 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