Web of lies
Ashley Belanger – Dec 18, 2023 7:08 pm UTC
found guilty of securities fraud and wire fraud in October 2022.”/>
Enlarge / Trevor Milton, founder of Nikola Corp., arrives at court in New York on Monday, Dec. 18, 2023. Milton is set to be sentenced on Monday after being found guilty of securities fraud and wire fraud in October 2022.
The disgraced founder and former CEO of the “zero emissions” truck company Nikola, Trevor Milton, was sentenced to four years in prison on Monday, Bloomberg reported.
That’s a lighter sentence than prosecutors had requested after a jury found Milton guilty of one count of securities fraud and two counts of wire fraud in 2022. During the trial, Milton was accused of lying about “nearly all aspects of the business,” CNBC reported.
From 2016 to 2020, Milton’s “extravagant claims” were fueled by a desire to pump up the value of Nikola stock, The New York Times reported. He was accused of misleading investors about everything from fake prototypes of emission-free long-haul trucks to billions worth of supposedly binding orders for hydrogen fuel cells and batteries that were never shipped. In a sentencing memo, prosecutors said that Milton targeted “less sophisticated investors,” the Times reported, engaging “in a sustained scheme to take advantage of” their inexperience.
Nikola’s stock peaked in 2020, but then dozens of fraud allegations were reported by the investment firm Hindenburg Research, causing Nikola stock to plummet promptly. “We have never seen this level of deception at a public company, especially of this size,” Hindenburg Research’s report said. Facing backlash, Milton resigned, voluntarily withdrawing from his company and selling off $100 million in Nikola stock to fund more than $85 million in luxury purchases, the Times reported. Today, Milton remains Nikola’s second-largest shareholder, Bloomberg reported.
By 2021, Nikola had admitted to the US Securities and Exchange Commission that nine statements made by Milton were “inaccurate.”
The price of these lies to investors was more than $660 million, prosecutors claimed.
Through it all, Milton has denied the charges, requesting to be sentenced to only probation while holding back tears, Bloomberg reported. At his sentencing hearing, he said that his “misstatements” came from a place of “deeply held optimism,” and he did not intend to cause any harm, Yahoo reported.
“I was not a very seasoned CEO,” Milton reportedly said.
Prosecutors sought heavier consequences, asking the judge to order Milton to pay a $5 million fine and sentence Milton to 11 years in prison.
Milton is likely to appeal, Bloomberg reported.
Nikola’s spokesperson provided Ars with a statement on the sentencing.
“Nikola has a strong foundation and is in the process of achieving our mission to decarbonize the trucking industry, which is our focus,” Nikola’s statement said.
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