Nikola will pay 125 million dollars to settle the SEC after a false demonstration

Image for article titled Electric Truck Manufacturer Nikola to Pay $ 125 Million in SEC Settlement After False Demonstration

Picture: Nikola Corporation

Manufacturer of eclectic trucks with GM support Nicholas (which is famous admitted one of his promotional videos was actually just a prototype rolling down a hill) will pay the Securities and Exchange Commission $ 125 million to settle accusations that it has deceived its investor by lying about its products and technical capabilities.

The settlement comes just over a year after the SEC reportedly started its investigation into the company over allegations that the company deceived investors about its business practices, and almost five months after the agency formally charged former Trevor Milton for breach of fraud protection. Milton was himself accused by the federal grand jury this summer on three counts of criminal fraud.

In a statement, the SEC accused Nikola of organizing an expansive public relations campaign that meant inflating the stock price before its products were ready for development.

The order also states that Nikola additionally misled investors by misrepresenting or omitting material facts about the charging time of his prototype vehicles, the status of the hydrogen station at its headquarters, projected costs and sources of electricity for planned hydrogen production, as well as economic risks and benefits. associated with its planned partnership with a leading carmaker, ”the SEC said.

In particular, the SEC stated that Nikola violated the provisions of the federal law on securities against fraud and control of data disclosure. The agency also previously disputed Milton’s active presence on social media, where he directly contacted investors and allegedly gave them false information.

“By choosing to promote Nicholas through social media, Milton was required by securities law to communicate fully, accurately and truthfully,” said Gurbir S. Grewal, Director of the SEC Enforcement Division. he said in July. In his statement, Nikola (who will neither admit nor deny SEC accusations as part of the settlement) said he was “pleased that this chapter is coming to an end.” Nikola also said that he would continue to cooperate with the SEC in another open investigation, published by the New York Times. notes may be a reference to a separate lawsuit against Milton.

Like many recent electric vehicle companies, Nikola received a cascading wave of commercials early in his life. To put that in perspective, at one point the company was appreciated to $ 26 billion despite not generating any revenue. Founder Trevor Milton’s vision for the company was so powerful that it even managed to earn the support of old guard carmakers, such as GM, which took $ 2 billion stake in the company before she ever sold a car. But much of that pomp can they were more aspirational than real.

Milton was forced to resign as president and CEO of the company last year after a report by the Hindenburg Research Investment Fund, which accused him of overestimating Nikola’s technological capabilities. (As much as it’s worth it, Hindenburg is a short-selling company it stood gain from Nikola’s stocks in sharp decline). At that time, Nikola was hot rejected they cite in a Hindenburg Research report as “false and misleading”. Among other things, the report also claims that Nikola relied on components procured from other suppliers despite telling investors he was using his own technology.

Source link

Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button