On Tuesday, Nikola settled with the US Securities and Exchange Commission (SEC) over federal security law violations. The company will pay a penalty of $125 million.
The SEC noted that Nikola violated the federal securities law’s antifraud and disclosure control provisions. As per the SEC, the company defrauded investors after misleading them about its products, technical advances and financial prospects
Further to this, the SEC found that former founder Trevor Milton embarked on a public relations tour to inflate and maintain Nikola’s stock price before production began.
In addition, the SEC found that Milton misled investors about the companies technological advancements, production outlook and financial outlook.
However, the company did not admit or deny the SEC’s findings. Nikola agreed to cease and desist from future violations and to pay the $125 million penalty.
The company will also establish a fund to return penalty proceeds to investors who were impacted.
Nikola agreed to continue cooperating with the SEC’s ongoing investigation into the founder and former chair, Trevor Milton.
The US Attorney’s Office in Manhattan charged Milton with two counts of securities fraud and one count of wire fraud back in July. Milton, for his part, resigned as chairmen in September and is out on $100 million bail as his criminal case continues to snake through the court.