Nikola founder Trevor Milton has been formally charged with defrauding investors after he lied about the company’s products and technology.
Prosecutors in New York this week charged Milton with two counts of securities fraud and one count of wire fraud, Reuters reports. The charges are related to statements Milton made between November 2019 and September 2020 regarding Nikola’s products and their capabilities. During a news conference on Thursday, U.S. Attorney Audrey Strauss said Milton “lied about nearly every aspect of the business,” during his tenure as executive Nikola’s chairman, which ended after he voluntarily stepped down from the role last September.
Milton had claimed that the company built a fully functioning prototype version of its battery-electric Nikola One truck, with the company even releasing a promotional video showing the truck apparently moving under its own power. However, a short-seller report published by Hindenberg Research later revealed the truck was nothing more than a rolling chassis and engineers had actually pushed the vehicle down a hill to get it moving for the promo video. Nikola also claimed it had developed its own lithium-ion vehicle batteries in-house when in reality, these battery packs were purchased from an outside supplier.
Milton’s lies were enough to convince General Motors to sign a memorandum of understanding with Nikola. Under the agreement, GM would receive a $2 billion stake in Nikola in exchange for various “in-kind contributions,” including technology sharing. GM later backed out of the deal, but then entered a memorandum of understanding to sell Nikola its Hydrotec hydrogen fuel cell systems for use in its future semi-truck offerings.
Spokespeople for Milton declined to comment on the criminal charges when approached by Reuters. The former auto executive, who is still worth an estimated $1.2 billion, was taken into custody Thursday and was expected to appear in court later in the day.
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Comments
This one seems a bit slimy…
Another auto scandal. After Volkswagen and now this, I’m worried that this will only be yet another in a string of scandals.
I hope people didn’t place their hard earned money in Nikola.
Mary Barra should be charged as well for all the cover ups at GM. The ignition key scandal was just the one that hit all the news outlets. Just think of all the customers GM has swindled out of their hard earned money to end up with lemons that are constantly in need of repair. My 2015 GMC Yukon Denali is the last new GM I am buying. I’ve spent more time fixing things on this vehicle than I have over the last 18 years on my 2003 Suburban with 360,000 miles even if you include maintenance. As an ex-certified mechanic and ex-GM Project Engineer what an example of bad engineering and manufacturing. I am actually embarrassed to say I worked at the Tech Center. Most stuff was so obvious it should have never happened.
The ignition scandal happened before Mary was in charge… and if your 2015 Yukon (also likely designed and built before Mary was in charge) qualifies as a lemon, have it bought back… Its an easy process, the first new GM vehicle I bought in my life had to be re-purchased, but GM made it easy and got me in another truck and life moved on. I have since bought dozens of new GM vehicles both personally and in my business, and while none of them have been perfect, they are all really good. I worn in an industry that Ford dominates, and so I see Ford’s experiences every day, some good, and some bad, seems they are all about he same.
GM isn’t gonna buy back a 2015 anything. That’s funny.
That was my point, buybacks happen in the first 2 years, In my case it was 6 months into ownership. GM does have some problems though that piss customers off, and they need to do better, 8 speed transmissions, and truck and SUV roof oil canning are two that come to mind, but I am sure there are others. GM at times lets some bad engineering slip through, but they also have a lot of brilliant engineering that slips through.
See!.. the wealthy American millionaires and billionaires love to steal even more than they already have bankrupting the American economy and making lower classes suffer!
That’s overzeolous and tyrannical “Capitalism” run amoke! $21 trillion parked overseas by the 1% depriving the American economy. Like Theodore Roosevelt on time threatened to make the dollar worth fifty cents if the banks did not turn it loose. Maybe we need same threat to get that “UNTAXED” money back circulating in the USA where it belongs!