New York federal prosecutors have charged Trevor Milton, the founder of the electric truck company Nikola, with engaging in an audacious scheme to defraud investors, according to an indictment unsealed Thursday.
Milton is accused of using his massive social media platform and TV appearances to mislead retail investors in order to inflate and maintain Nikola’s stock price. The scheme resulted in him receiving tens of millions of dollars in personal benefits, according to the indictment.
“Milton sold a version of Nikola not as it was – an early stage company with a novel idea to commercialize yet-to-be proven products and technology – but rather as a trail-blazing company that had already achieved many groundbreaking and game-changing milestones,” the indictment filed in the U.S. District Court for the Southern District of New York says.
“In presenting his version of Nikola to investors, Milton repeatedly made false and misleading statements about core aspects of Nikola’s products, technological advancements, and commercial prospects.”
Federal prosecutors say Milton falsely claimed, for instance, that Nikola’s first semitruck prototype could be driven under its own power and even created a misleading video that purported to show it. Milton also falsely claimed that the company was producing hydrogen at a cost that was four times less than the prevailing market rates, and that it had obtained “billions and billions and billions and billions” of dollars of committed orders for an electric pickup truck.
“Today’s charges against Milton are where the rubber meets the road,” U.S. Attorney Audrey Strauss said at a press conference prior to the court hearing.
Milton, who resigned as Nikola’s executive chairman in September, surrendered to authorities Thursday morning. He pleaded not guilty to two counts of securities fraud and one count of wire fraud, and was released on $100 million bond.
A spokesperson for Milton's legal team said he was innocent.
"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," the spokesperson said. "From the beginning, this has been an investigation in search of a crime."
The indictment was unsealed five months after Nikola admitted that Milton had misled investors from July 2016 through July 2020. In a statement, Nikola said Milton has had no involvement with the company since he resigned last year.
“Today’s government actions are against Mr. Milton individually, and not against the company,” it said. "Nikola has cooperated with the government throughout the course of its inquiry.”