Nikola Motor’s disgraced founder, Trevor Milton, has been ordered to repay the company $165 million in damages following an arbitration proceeding in New York.
In December 2021, Nikola agreed to a settlement with the SEC, agreeing to pay a fine of $125 million. This settlement was in response to allegations of misleading investors about the capabilities of their products, their business prospects, and their technology. Nikola is now seeking reimbursement for the fees incurred by their attorneys during this process.
The arbitration panel determined that Nikola was entitled to these funds to cover the costs and damages stemming from actions that were under scrutiny in government and regulatory investigations. This includes the December 2021 settlement with the Securities and Exchange Commission (SEC) and an associated civil penalty. (via CNBC)
Trevor Milton, who founded Nikola in 2014 and held positions as both CEO and executive chair, resigned in September 2020 after allegations were made by short seller Hindenburg Research. These allegations claimed that Nikola had made false statements about their technology to artificially boost their stock prices and secure partnerships with major automakers.
Nikola has faced a tumultuous period since Milton’s departure. The company’s stock value plummeted following the revelation of a misleading marketing video that falsely showed an 18-wheeler truck appearing to operate on its own electric power. In reality, it was rolling down a hill.
In October 2022, Milton was found guilty in a federal court on three counts of fraud, directly related to false statements made during his leadership of the company. His sentencing is scheduled for November 28, 2023.