Nikola Corporation has agreed to pay $125 million to settle fraud charges brought by SEC for defrauding and misleading investors about its products, technical advancements, and commercial prospects.
The resolution follows SEC’s litigation filed earlier this year against Nikola’s founder and former CEO, Trevor Milton.
The settlement follows the SEC’s litigation from earlier this year against Trevor Milton, the company’s founder and former Chief Executive Officer and Executive Chairman.
According to SEC, Milton went on a public relations campaign giving investors false impressions about Nikola’s development regarding its product base, technological advances, in-house production capabilities and financial outlook. At the time, the company had not produced a single commercial product, however, Milton wanted to maintain and inflate the firm’s stock price.
Milton also failed to disclose important details about the refueling time of its prototype vehicles, the status of its headquarters’ hydrogen station, the expected cost and sources of electricity for its hydrogen production, and the economic risks that may arise from its proposed partnership with a leading auto manufacturer.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement said:
As the order finds, Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology. This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.
The US regulator found that Nikola violated antifraud and disclosure laws. The company did not confirm nor deny the findings but agreed to pay a $125 million penalty and to cease and desist from future violations. Nikola has also agreed to cooperate with the SEC in ongoing investigations.
