The electric vehicle company will pay $ 125 million to settle the Securities and Exchange Commission’s civil charges for investor fraud. The company is accused of misleading investors about its own production capabilities, technological advances, reservations and orders, hydrogen production and more.
SEC founder and former CEO Trevor Milton undertook a “public relations campaign aimed at inflating and maintaining Nikola’s stock price” via tweets and media appearances before the company made a commercial product. The company is also said to have deceived investors by “misrepresenting or omitting material facts” about the hydrogen station at its headquarters, how long it will take to refuel its concept vehicles, the source and cost of energy for planned hydrogen production and the risks and benefits from a major car manufacturer.
“As stated in the order, Nikola Corporation is responsible for both Milton’s alleged misleading statements and other alleged fraud, all of which falsely portrayed the true state of the company’s business and technology,” said SEC Director Gurbir S. Grewal.
Although Nikola did not admit or deny the SEC’s accusations of violating the securities law, he agreed to some voluntary obligations, to pay the fine and to stop and give up “future violations of the provisions charged.” It will also cooperate with ongoing litigation and investigations.
“We are pleased to bring this chapter to an end as the company has now resolved all government investigations,” Nikola said in a statement. “We will continue to pursue our strategy and vision to fulfill our business plan, including delivering trucks to customers, expanding our production facilities and our sales and service network, and building our hydrogen infrastructure ecosystem, including hydrogen production, distribution and dosing stations. “The company also said it was seeking compensation from Milton” for costs and damages related to government and regulatory investigations. “
Nikola became a public trading company in June 2020 through a special purpose vehicle acquisition agreement (SPAC), which allows companies to bypass the usual listing process. That September, the SEC investigated Nikola’s claims about electric trucks. Milton, who resigned as chief executive just before the company went public, as executive chairman a few days after news of the investigation surfaced.
A grand jury on fraud charges in July 2021. He is accused of lying to investors about “almost all aspects of business” in order to increase Nikola’s share price. He denied the accusations and is free on bail until the trial scheduled for April.
In other news, Nikola delivered his first electric trucks to customers last week.
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