A federal grand jury indicted Trevor Milton, the founder of Nikola, on three counts of criminal fraud. The charges come after Milton lied about nearly all aspects of the business to bolster stock sales of the auto manufacturer.
In addition, the grand jury noted that Milton should forfeit all property traceable to the commission of the offences. That is likely to include the more than $1 billion he earned when the company went public.
The US Attorney’s Office accused the 39-year old ex-chairman of two counts of securities fraud and one count of wire fraud. One of the securities fraud charges includes making false statements about the company.
In addition, the Securities and Exchange Commission filed civil securities fraud charges against Milton. The SEC is asking the US District Court to bar Milton from acting as an officer at a company that issues securities, disgorges all ill-gotten gains, and pays a fine.
Milton entered custody after the indictment and will appear in court later today.
Nikola, for its part, is distancing themselves from their former chairman. In February, the company noted that Milton made several misleading statements from 2016 through to the company IPO. In reaction to the news, Nikola stock dropped as much as 11%.
UPDATE: In a statement provided to Drive Tesla, a spokesperson for Milton’s legal team says he has been wrongly accused and will be found innocent. He has since been released on. $100 million bail.
Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.
Trevor Milton is an entrepreneur who had a long-term vision of helping the environment by cutting carbon emissions in the trucking industry.
Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses.
From the beginning, this has been an investigation in search of a crime. Justice was not served by the government’s action today, but it will be when Mr. Milton is exonerated.