(Bloomberg) – Nikola Corp. founder Trevor Milton has been found guilty of fraud for defrauding investors in his electric truck company, a startling fallout for door-to-door sales staff returning. Billionaire promises to revolutionize the auto industry.
Milton, 40, was found guilty on Friday of one count of securities fraud and two counts of electronic fraud by a federal grand jury in Manhattan, boosting the U.S. Justice Department’s effort to crack down on corporate crime. Karma. He could spend years in prison.
Read more: Milton is described as a serial liar and victim of a twisted case, in the ending
It’s been a wild ride for the charismatic businessman, whose fortune has fallen into the hundreds of millions since Nikola shares skyrocketed when the company went public in June 2020. Milton, who remains a The company’s largest individual shareholder, founded Nikola in 2014 and built it into a $34 billion company when it went public, more than Ford Motor Co. at one point.
The meteoric rise of the startup, which had no revenue at the time, came amid a wave of electric vehicle companies going public through special purpose acquisitions, or SPAC, starting two years ago as investors scoured for the next Tesla. Going the SPAC route allows them to market their company based on predictions of future performance rather than actual financial results. Some of the biggest names on Wall Street have poured money into the field.
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After Nikola went public, ordinary investors also began to pay attention to Milton’s vision, with the company being discussed as much online as Elon Musk was. While Nikola’s initial focus was on heavy-duty commercial trucks, it has since branched out to power electric sports and residential electric vehicles. It was all fueled by endorsements from celebrities like the Diesel Brothers’ Heavy D, who promoted the Badger pickup, a product that never made it past the rendering stage.
Prosecutors argued that Milton enticed retail investors to buy Nikola stock by making false statements about the company’s products and capabilities during numerous podcast and TV interviews, news reports. greatly enhanced Nikola’s capacity in the production of hydrogen fuel cell trucks as well as the company’s fuel production capabilities. it’s him.
Assistant U.S. Attorney Jordan Estes told the jury during the closing arguments on Thursday. “His lies may have surfaced on social media, but make no mistake: This is an old-fashioned scam.”
Read more: CEO Nikola says he learned the truck had no power only after he was hired
Milton’s attorneys called the case a “misrepresentation of prosecution,” arguing that their client never intended to mislead potential investors and that in any event, his statement was irrelevant. important or important enough to influence the decisions of such investors.
Milton was generally upbeat when he arrived in court in a suit and tie to sit with his attorneys. Sometimes there were dozens of people in the courtroom, with his family and friends lining up the first two rows behind the defense desk.
In his own closing act, which left his wife Milton in tears, defense attorney Marc Mukasey asked jurors to “imagine the nightmare that happened to Trevor, aged 40, letting his life hang. suspended” because of excessive prosecution.
There are also lighter moments. During the tense vigil during Friday’s jury discussion, Mukasey practiced a few golf swings with a ghost club.
During the trial that began with the opening statement on September 13, the government called dozens of witnesses. It begins with Paul Lackey, a former Nikola contractor whose alleged fraud helped advance the criminal investigation.
Lackey, an engineer at electric powertrain company EVDrive, said he provided information to Nate Anderson’s Hindenburg Research in exchange for a portion of profits from short selling the company. The September 2020 report by the short seller called Nikola a “complicated fraud” that, among other allegations, overstated the capabilities of its first test trucks. Nikola shares plummeted.
The government called Nikola’s other insiders to the witness stand. Among them:
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Brendan Babiarz, a former designer for Nikola, who says a prototype of the electric vehicle startup’s proposed Badger pickup is made in part from Ford F-150 Raptor parts
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CEO Mark Russell, who said he only learned after joining the company that its first electric truck had no natural gas turbines or fuel cells when Milton announced it.
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Chief Financial Officer Kim Brady, who said Milton was so “focused” on the company’s stock price that when the stock dropped $5 on its first trading day, he thought something was wrong with the company’s stock price. Nasdaq
The defense called Harvard Law School professor Allen Ferrell, an expert on economics and the stock market, who told the jury that traders had almost exclusively denied the claims Milton made during the trial. the period from when his company went public until he resigned.
Read more: Nikola founder Trevor Milton will not testify in fraud trial
The lawsuit is US v. Milton, 21-cr-478, US District Court, Southern District of New York (Manhattan).
Read more
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Nikola The Whistleblower Tells Their Side of the Trevor Milton Saga
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Investor Nikola lost $160,000 because of Milton hype, he tells the jury
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Nikola Saw ‘Massive’ Badger loses but still supports Milton
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Trevor Milton Faces the Jury in His Hardest Sales Job yet
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