Nikola (NKLA) founder Trevor Milton was found guilty Friday of three fraud counts charged with spreading lies about an electric truck startup for personal gain.
A federal jury in Manhattan has found Milton, 40, guilty of two counts of wire fraud and one count of securities fraud, and sentenced him to up to 25 years in prison, according to Bloomberg and other news reports. Milton pleaded not guilty to all government charges.
Nikola gained notoriety in September 2020 after a short seller, Hindenburg Research, claimed the company had created a “sea of lies” to mislead investors. Memorably, Hindenburg accused Nicola of releasing a deceptive video that made it appear that Nicola Wang’s semi-truck was traveling at high speed on its own, when in fact it was rolling down a hill. criticized.
Milton resigned from the company just days after Hindenberg’s report, and in July 2021, Manhattan prosecutors charged him with deceiving investors to boost the value of his company’s stock. Prosecutors say Milton lied about the capabilities of Nikola’s trucks and fueling infrastructure from November 2019 until the month he resigned.
Founded in 2015, Nikola officially debuted on June 4, 2020 through a merger with VectoIQ Acquisition Corp (VTIQ), a special acquisition company founded by former General Motors (GM) employees. did.
Prosecutors said Milton promoted a misleading video of Nicola Wang’s semi truck to make it look like it could drive itself. He is also accused of lying about the existence of hydrogen fuel manufacturing and fueling facilities, and of misleading investors about the cost of hydrogen production. Milton has also allegedly made false statements about Badger Pickup his truck, truck orders, and battery technology.
Prosecutors said Milton used social media platforms such as Twitter (TWTR) and YouTube (GOOG, GOOGL) to spread lies. That boosted support for the stock, especially from individual investors, prosecutors said.
According to prosecutors, the deception made Milton a billionaire with a stock worth $8.5 billion.
U.S. Attorney Damien Williams tweeted on Friday that other fraudsters should pay attention to Milton’s conviction. It’s a scam, plain and simple, and this firm has no patience for it. Anyone. It doesn’t work.”
Ahead of criminal charges, Nikola has paid the U.S. Securities and Exchange Commission a $125 million fine to settle charges of misleading investors about its products, technological advances and commercial prospects. agreed to do so.
Jurors began deliberations on Friday after a nine-day delay due to COVID-19. In an email to Yahoo Finance, Nikola said he did not comment on the Milton case.
However, in a statement issued at the time of Milton’s indictment, the company said the government’s action against Milton was brought against him personally, not against him.
“The company has been cooperating with the government in the course of its investigation. We are focused on that,” the statement said.
Nikola, which once traded above $65 a share, was trading around $3 at market close on Friday.
Alexis Keenan is a legal correspondent for Yahoo Finance. Follow Alexis on Twitter @alexskweed.
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