The founder of battery-electric startup manufacturer Nikola agreed to pay a $125 million civil penalty to resolve fraud claims brought by Securities and Exchange Commission regulators. After the Nikola Corporation delivered its first pair of Nikola Tre battery-electric pilot trucks to Total Transportation Services in California in December, Trevor Milton appears to be rethinking his long-term legal strategy.
“Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified,” his legal team reportedly stated. “Trevor Milton is an entrepreneur who had a long-term vision of helping the environment by cutting carbon emissions in the trucking industry. Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses. From the beginning, this has been an investigation in search of a crime. Justice was not served by the government’s action today, but it will be when Mr. Milton is exonerated.”
Scheduled to face a criminal trial in April for allegedly misrepresenting the Nikola One model’s success, Milton’s legal team demands access to photographic evidence, prototypes, and various Nikola property and locations. In July, he reportedly pled not guilty at a Manhattan, N.Y., courtroom to three counts of what essentially involves lying for profit.
While under fire at the embattle Nikola Motors, Milton began offloading his shares. Since pleading not guilty in July, reports indicate he sold upwards of $300 million in stocks while free on a $100 million bond. Many estimate his net worth rapidly declined, and the company’s stock went off the cliff following the indictment. Nikola, which enjoyed a peak of $93.99 per share, plummeted to $12.03. Despite Milton’s not guilty plea, prosecutors delivered a stinging statement, claiming the battery-electric truck visionary gamed the system.
“As alleged, Trevor Milton brazenly and repeatedly used social media, and appearances and interviews on television, podcasts, and in print, to make false and misleading claims about the status of Nikola’s trucks and technology,” Manhattan U.S. Attorney Audrey Strauss reportedly said. “But today’s criminal charges against Milton are where the rubber meets the road, and he now will be held accountable for his allegedly false and misleading statements to investors.”
If the allegations against Milton are plain to see, why the courtroom wrangling over evidence?
“Inspecting these items, and demonstrating the functionality of the technology, go to the crux of his defense,” Milton’s lawyers reportedly stated.
What’s troubling about the timing of the criminal indictment and civil penalties is that short-seller Hindenburg Research released a damaging report just as Milton and GM brokered a major deal to bring the Badger model electric pickup truck to fruition. The report and subsequent charges resulted in the deal getting scuttled and Nikola stocks falling. In all likelihood, Nikola stocks would have risen and cost short-sellers a pretty penny.
Now Milton’s legal team claim they are being denied access to Badger and Nikola One semi information.
Sources: ttnews.com, axios.com
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