Automaker Nikola Founder Fraud Trial Begins | State News

NEW YORK (AP) — Automaker Nikola Corp. founder Trevor Milton was charged Monday with fueling investor frenzy for the startup by making false claims about its ability to produce trucks that run on electricity or hydrogen. was brought to justice. Fuel cell.

Nikola’s stock price crashed and many investors suffered heavy losses in 2020. This follows reports that cast doubt on Milton’s optimistic claims about the company’s ability to produce state-of-the-art vehicles.

For example, the company released a video showing a prototype truck driving on a desert highway. Prosecutors said the truck wasn’t actually running and was rolling down a hill for commercials.

The company’s promotional campaigns have won many small investors. Nikola’s stock price hit nearly $66 in June 2020, putting the company’s market valuation briefly above some of the major established automakers. The stock is currently trading below $5.50 per share.

Milton, who lives in Oakley, Utah, indicted last year on charges of securities fraud and wire fraud. Jury selection began Monday in federal court in New York.

He pleaded not guilty and was released on $100 million bail.

Milton’s attorneys will argue at trial that he did not intend to deceive anyone about the company’s products or technology.

Milton founded Nikola in 2015 and announced it would go public in 2020. He resigned in September of that year after the company signed his $2 billion contract with General Motors, but he received reports making allegations of fraud.

At the time, Nicola said the report was full of misleading statements and accusations.

The company paid $125 million last year to settle a civil lawsuit filed against it by the Securities and Exchange Commission. Nicola denied any wrongdoing in making that agreement.

The company remains headquartered in Arizona. The company said it has begun delivering some vehicles to customers and is ramping up to produce thousands of trucks annually.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.