Nikola founder Trevor Milton was found guilty of fraud by a U.S. jury on Friday, accusing him of lying to investors about the electric and hydrogen fuel cell company’s technology.
After about five hours of deliberation, the jury found Milton guilty of one count of securities fraud and two counts of wire fraud. Milton was acquitted of another count of securities fraud. Milton could face years in prison.
Prosecutors accused Milton of making false and misleading representations about “almost every aspect of the business,” including that Nikola had a fully functional prototype even though Milton knew it was inoperable. Milton also claimed that he had built an electric and hydrogen-powered pickup from scratch using Nikola parts and technology, even though Nikola did not do so, according to prosecutors.
“Trevor Milton sings to Nikola investors over and over again. It’s fraud, plain and simple,” U.S. Attorney Damian Williams Say in a statement following the verdict. “Let this case be a warning to anyone flippant about the truth to get investors to give up their money. It won’t end well.”
A business partner who worked with Milton before Nikola described him to CNN Business in 2020 as untrustworthy, prone to exaggeration and not delivering on promises. Some have questions about his character and integrity.
Nikola went public in 2020, and although it never delivered a car, it briefly surpassed Ford in market value that year. GM announced in 2020 that it plans to invest in Nikola to jointly develop electric trucks. GM also plans to provide the startup with equipment for its hydrogen fuel cell trucks.
Milton’s announcement about Nikola comes as the company joins a growing number of tech and electric vehicle companies that have gone public through special purpose acquisition vehicles (SPACs). He is also accused of defrauding the seller of the Utah ranch, who accepted Nikola stock options as part of the purchase price, according to Milton to the company.
But Nikola’s stock fell sharply after a scathing report called the company an “intricate fraud.” The report was published by Hindenburg Research, a short seller who profited by shorting companies.
Milton of Oakley, Utah, was indicted in July 2021.
GM later relinquished ownership of Nikola and ended plans to produce the Badger pickup.
Milton, who called the report critical of Nikolai a “successful job” and a “lie”, resigned as Nikolai chairman in September. 2020.
Nikola’s stock has fallen about 95% since its June 2020 high. The company acknowledged in 2021 that Milton made seven “inaccurate” statements about the company’s progress between July 2016 and July 2020.
Last year, Nikola agreed to pay $125 million to the Securities and Exchange Commission to settle allegations it defrauded investors.