Prosecutors argued that Milton pumped up the value and prestige of his company with lies and misrepresentations.
Nikola Corp. (NKLA) – Get Nikola Corporation Report founder Trevor Milton was found guilty Friday on one count of securities fraud and two counts of wire fraud. He faces the possibility of multiple years in prison.
Prosecutors had argued in a Manhattan courtroom that Milton misrepresented the truth on multiple occasions to generate interest in the zero-emissions trucks and technology company he created in 2015. After the company went public, it came to be worth some $34 billion and for a time had a larger value than Ford Motor Co.
Among the allegations were that he made claims regarding the technological capabilities of his trucks that were beyond exaggerations and, in fact, were outright lies.
He also would wildly fabricate the number of orders pending for the trucks in order to create a false perception that business was booming and the company was a solid bet for investors.
Milton resigned from Nikola in 2020 as public awareness of his falsifications began to spread. The company was forced to settle a Securities and Exchange Commission investigation for $125 million.
During the trial, a video advertisement posted to Nikola’s Twitter account — at Milton’s direction, prosecutors said — showed a semi-truck driving on a road in the desert. “In reality, said prosecutors, the truck, with its door taped shut and batteries removed, was towed to the the top of a hill and rolled down it,” reported the Wall Street Journal.
A man who sold Milton a ranch in Utah testified about an ill-fated real estate transaction. “Mr. Milton convinced him to accept Nikola stock as payment by telling lies about the company’s hydrogen-fuel production and other technology,” the Journal wrote.