US prosecutors charged Nikola founder and former executive chairman Trevor Milton with defrauding investors over myriad claims about the company's electric vehicles, according to an indictment released Thursday.
The US Attorney's office in New York charged Milton with three counts of fraud, according to a 49-page document.
Milton, who resigned from Nikola in September of last year, allegedly claimed that the company had built a "full-functioning" semi-truck prototype when Milton "knew that the prototype was inoperable," according to the indictment.
He made these and other false claims to "induce retail investors to purchase Nikola's stock," the indictment said.
When Milton's statements were shown to be false, shareholders, including some with little prior investing experience, "suffered tens and even hundreds of thousands of dollars in losses, including, in certain cases, the loss of their retirement savings or funds that they had borrowed to invest in Nikola," said the indictment.
Milton vaulted to prominence in September 2020 when the company announced a partnership with General Motors shortly after going public through a merger with a special-purpose acquisition company (SPAC).
US prosecutors charged Nikola founder Trevor Milton with fraud over false statements about the Badger and other vehicles Photo: Nikola Motor / -
But things quickly fell apart. Two days after the GM deal was announced, Hindenburg Research published a report accusing the startup of "intricate fraud" based on multiple lies by Milton.
Milton left the company later that month and GM terminated the transaction to take a stake in Nikola in late November.
Nikola said that Milton has not been involved with the company since his resignation.
"Today's government actions are against Mr. Milton individually, and not against the company," Nikola said in a statement.
"The company has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery electric trucks later this year from the company's manufacturing facilities."
Shares of Nikola slumped 6.8 percent to $13.23 in morning trading.
