Trevor Milton, the founder and former chairman and CEO of electric heavy truck maker Nikola, was found guilty in federal court on Friday of three of four counts of fraud relating to false statements he made to drive up the value of Nikola’s stock.
Milton was charged with two counts of securities fraud and two counts of wire fraud, all related to statements he made about Nikola’s business while he was chairman and CEO of the company. Jurors found him guilty on one count of securities fraud and both of the wire fraud counts.
The U.S. Attorney’s Office in Manhattan had alleged that Milton lied about “nearly all aspects of the business” he founded in 2014 during his time leading the company. Those lies, prosecutors said, were intended to induce investors to bid up the price of Nikola’s stock.
“On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight,” Assistant U.S. Attorney Nicolas Roos said in his opening statement in September.
Nikola’s stock price briefly surged to over $90 per share in June 2020, just days after it went public via a merger with a special-purpose acquisition company. For a short period, Nikola – a company with no revenue – was more valuable than century-old Ford Motor.
That ambitious valuation didn’t last. Nikola’s shares fell sharply once Milton was forced out of the company in September 2020, after the company’s board of directors found that some of the fraud allegations made by short-seller Hindenburg Research had merit.
The U.S. Department of Justice and the Securities and Exchange Commission (SEC) both opened investigations in the months following Milton’s departure. In July of 2021, a grand jury indicted Milton on three counts of fraud; a fourth count was added in June of 2022.
Nikola itself wasn’t facing charges in this case. The SEC had brought related civil charges against the company last year. Those charges were settled in December after Nikola agreed to pay a $125 million fine. Although Milton still owns Nikola stock, the company had otherwise cut ties with him.