In October 2022, Trevor Milton, the founder of Nikola Motors, was found guilty in court of one count of securities fraud and two counts of wire fraud. The severity of the charges could have resulted in a staggering 60-year prison sentence for Milton.
Prosecutors, however, sought an 11-year prison sentence and a $5 million fine. The defense, on the other hand, pleaded for a suspended sentence. During the trial, Judge Edgar Ramos, after the sentencing, addressed Milton directly, saying, "As hard as it is for you or your family to hear this, I believe the jury made the right decision." Milton, claiming his innocence, expressed, "I had no intention of harming anyone and I did not commit the crimes I am charged with.
" He emphasized his rural background and quoted Bible verses in his defense.
Securities and Investors
The core of the charges against Milton revolved around securities fraud, where he was accused of inflating the value of Nikola Motors stock through deceptive practices.
Prosecutors alleged that Milton misled investors in nearly every aspect of the business. One notable claim included Milton's claim that the company has a fully functional electric truck, backed up by a video purportedly showing the Nikola One prototype moving on its own.
However, the indictment revealed that the truck was actually going downhill, and Milton was involved in creating the video. Furthermore, Milton was accused of fabricating statements about the company's reservations, production costs and revolutionary battery technology.
Nikola Motors, despite the legal battle, remains in business, having invested $61.8 million in fixing battery problems. The company plans to resume deliveries of its electric truck in early 2024.
660 million dollars in investor losses
The fallout from Milton's actions had a severe impact on Nikola Motors, with the company's stock down as much as 99 percent since 2020. Investors reportedly suffered losses that exceeded $660 million.
Milton, who sold about $100 million of his stock in 2020, spent most of it on luxury items, jets and real estate. Milton is expected to appeal the verdict, having already requested a new trial.