Breaking Stories

Nikola Founder Trevor Milton Guilty of Defrauding Investors

S&P 500




Dow 30








Russell 2000




Crude Oil
















10-Yr Bond
















CMC Crypto 200




FTSE 100




Nikkei 225




(Bloomberg) — Nikola Corp. founder Trevor Milton was convicted of fraud for misleading investors in the electric truck company, a stunning downfall for the door-to-door salesman turned billionaire who promised to revolutionize the auto industry.

Milton, 40, was found guilty Friday of one count of securities fraud and two counts of wire fraud by a federal jury in Manhattan, in a boost to the US Justice Department’s efforts to crack down on corporate crime. He faces the possibility of years in prison.

Read More: Milton Described as Serial Liar, and as Victim of Distorted Case, in Closings

It’s been a wild ride for the charismatic entrepreneur, whose fortune has declined to the hundreds of millions since the surge in Nikola shares when the company listed its shares in June 2020. Milton, who remains the company’s biggest individual shareholder, founded Nikola in 2014 and built it into a company valued at $34 billion when it went public, more than Ford Motor Co. at one point.

The meteoric rise of the startup, which had no revenue at the time, came amid a wave of electric vehicle companies going public through special purpose acquisition companies, or SPACs, starting two years ago as investors scoured the landscape for the next Tesla. Going the SPAC route allowed them to market their companies based on future projections of performance rather than actual financial results. Some of the biggest names on Wall Street poured money into the sector.

Celebrity Endorsements

After Nikola’s listing, ordinary investors started to take notice of Milton’s vision as well, with the company much discussed online just as Elon Musk’s has been. While Nikola’s initial focus was on heavy commercial trucks, it branched out to power sport and consumer EVs. It was all supercharged by celebrity endorsements from the likes of the Diesel Brothers’ Heavy D, who promoted the Badger pickup, a product that never made it beyond the renderings stage.

Prosecutors argued that Milton enticed retail investors to buy Nikola shares by making false statements about the company’s products and capabilities in numerous interviews on podcasts and TV, sharply exaggerating Nikola’s capacity to manufacture trucks powered by hydrogen fuel cells as well as its ability to produce the fuel itself.

It was “lie after lie after lie,” Assistant US Attorney Jordan Estes told the jury in her closing argument on Thursday. “His lies may have been on social media, but make no mistake: This was an old-fashioned fraud.”

Read More: Nikola CEO Says He Learned Truck Had No Power Only After He Was Hired

Milton’s lawyers called the case a “prosecution by distortion,” contending that their client never meant to deceive potential investors and that, in any case, his statements weren’t material, or important enough to influence those investors’ decisions.

Milton was generally upbeat as he arrived at court in a suit and tie to sit with his lawyers. At times there were dozens of people in the courtroom, with his family and friends packing the first two rows behind the defense table.

In his own closing, which brought Milton’s wife to tears, defense attorney Marc Mukasey asked the jurors to “imagine the nightmare it is for Trevor, at 40 years old, to have his life hang in the balance” because of an overzealous prosecution.

There were lighter moments, too. In the tense vigil during jury deliberations on Friday, Mukasey took a few practice golf swings with a phantom club.

During the trial, which kicked off with opening statements on Sept. 13, the government called a dozen witnesses. It started with Paul Lackey, a former Nikola contractor whose allegations of fraud helped spur the criminal probe.

Lackey, an engineer at the electric-drive systems company EVDrive, said he gave Nate Anderson’s Hindenburg Research information in exchange for a share of its profits from shorting the company. The short-seller’s September 2020 report called Nikola an “intricate fraud” that, among other allegations, overstated the capabilities of its earliest test trucks. Nikola shares tumbled.

The government called other Nikola insiders to the witness stand. Among them:

Brendan Babiarz, a former designer for Nikola who said a prototype of the electric vehicle startup’s planned Badger pickup truck was made partly of components from a Ford F-150 Raptor

Chief Executive Officer Mark Russell, who said he learned only after joining the company that its debut electric truck had neither a natural-gas-powered turbine nor a fuel cell when Milton unveiled it

Chief Financial Officer Kim Brady, who said Milton was so “hyper-focused” on the company’s stock price that when the shares fell $5 on their first day of trading, he thought something was wrong with the Nasdaq

The defense called Harvard Law School professor Allen Ferrell, an expert on economics and the stock market, who told the jury that traders mostly shrugged off statements Milton made between the time his company went public and the time he resigned.

Read More: Nikola Founder Trevor Milton Won’t Testify in Fraud Trial

The case is US v. Milton, 21-cr-478, US District Court, Southern District of New York (Manhattan).

Read More

Nikola Whistleblowers Tell Their Side of the Trevor Milton Saga

Nikola Investor Lost $160,000 on Milton’s Hype, He Tells Jury

Nikola Saw ‘Massive’ Badger Losses But Backed Milton Anyway

Trevor Milton Faces Jury in His Toughest Sales Job Yet

Most Read from Bloomberg Businessweek

Exxon’s Exodus: Employees Have Finally Had Enough of Its Toxic Culture

America Is Unleashing Its Economic Arsenal

Coming Soon on Netflix: A New Netflix

This Is What the Gas Station of the Future Will Look Like

Twitter Faces Only Bad Outcomes If the $44 Billion Musk Deal Closes

©2022 Bloomberg L.P.



U.S. jury convicts Nikola founder of fraud in New York trial

NEW YORK (Reuters) -Nikola Corp founder Trevor Milton on Friday was convicted by a U.S. jury of fraud in a case alleging he lied to investors about the electric vehicle company’s technology. The jury found Milton guilty on one count of securities fraud and two counts of wire fraud after deliberating for around five hours. Milton was acquitted on an additional count of securities fraud.


Credit Suisse in talks with underwriters as it weighs capital options – report

The Swiss bank would prefer to avoid selling new shares at current depressed levels, but is making preparations should it be necessary, according to the report. Credit Suisse declined to comment. Zurich-based Credit Suisse’s Chairman Axel Lehmann pledged on Friday to reform the bank after a “horrible” 2021 in which it lost billions of dollars.

Motley Fool

Why Rivian’s Shares Fell 7.5% on Friday

Shares of electric vehicle (EV) manufacturer Rivian (NASDAQ: RIVN) sank in Friday morning trading. At that time, the tech-heavy Nasdaq Composite was down by 2.3%. A number of factors were working against Rivian’s shares.


Yet Another Experimental Feature By Amazon After Amazon Glow, Amazon Scout and Amazon Care To Be Pulled Down, Inc (NASDAQ: AMZN) shut down a virtual tour feature called “Amazon Explore,” which it launched during the pandemic. Amazon acknowledged supporting its affected employees during this transition and working to identify other opportunities within Amazon, Bloomberg reported. Amazon launched Explore in 2020, targeting those suffering cabin fever during pandemic lockdowns. Users could pay $7.50 for a 50-minute guided tour of sites such as an animal sanctuary in Costa Rica or $50 for an hou


Fed Officials Look at Higher Peak for Rates as Inflation Endures

(Bloomberg) — Federal Reserve policymakers suggested that they’re prepared to raise interest rates higher than previously planned, though not necessarily at a faster pace, to defeat persistent high inflation.Kansas City Fed President Esther George said Friday that officials should raise rates to a restrictive level while avoiding too much haste, which could “disrupt financial markets and the economy in a way that ultimately could be self-defeating.”George, in a virtual speech to S&P Global Rati

The New York Times

Dutch Princess ‘Can’t Really Go Outside’ After Threats

The goal for Princess Amalia of the Netherlands as she went off to college last month at the University of Amsterdam was for her to live life like a regular student as much as possible, moving into a house with other students and studying politics and law. The reality for the 18-year-old future queen turned out to be something altogether different. On Thursday, her parents, King Willem-Alexander and Queen Maxima, said that she had moved back home and was largely confined to one of the royal fami

Motley Fool

Why Tesla Stock Was Falling This Afternoon

Shares of Tesla (NASDAQ: TSLA) were initially trading higher at the market open on Friday before market traders turned their attention back to the economy, which sent most stocks down today. As of 12:42 p.m. ET, the stock was trading down 5.4%, while the Nasdaq Composite was down 2.3%. The sell-off comes after another analyst issued a positive note on Tesla ahead of next week’s third-quarter earnings report.

Motley Fool

Where Will Block Be in 5 Years?

Block (NYSE: SQ), the well-known fintech innovator headed by tech genius Jack Dorsey, has experienced a slowdown in recent quarters. Where could Block be five years from now, and is the stock a buy today? Block has come a long way from selling those little white squares that small merchants plugged into their smartphones to accept card payments.

Insider Monkey

10 Stocks to Sell According to Billionaire Dan Loeb

In this article, we will take a look at the 10 stocks to sell according to billionaire Dan Loeb. To skip our analysis of Dan Loeb’s profile, investment strategy, and 13F holdings, you can go directly to see the 5 Stocks to Sell According to Billionaire Dan Loeb. Daniel Seth Loeb is the CEO and […]

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

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