The U.S. fraud trial of Trevor Milton, the founder and former chief executive of Nikola Corp who prosecutors accuse of lying to investors about the electric- and hydrogen-powered truck maker, is set to begin on Monday with jury selection in Manhattan federal court.
Prosecutors have said Milton sought to deceive investors about the company’s technology starting in November 2019. He left the company in September 2020 after a report by short seller Hindenburg Research called the company a “fraud.”
Milton, 40, has pleaded not guilty to two counts of securities fraud and two counts of wire fraud. His lawyers have indicated they will argue that Milton had no intent to defraud investors and that other top executives at Nikola, including its general counsel, approved of Milton’s statements.
Milton was indicted last year. Prosecutors said he made false statements about Nikola’s progress on developing its technology as the company joined the mounting number of tech and electric vehicle companies going public through special purpose acquisition vehicles, or SPACs.
Prosecutors said Milton’s improper statements included that Nikola had built an electric- and hydrogen-powered “Badger” pickup from the “ground up,” developed batteries in-house that he knew it was purchasing elsewhere, and had early success in creating a “Nikola One” semi-truck he knew did not work.
Milton’s statements on social media and in podcasts targeted retail investors who piled into the stock market during COVID-19 pandemic-related lockdowns, they said. Milton also stands accused of defrauding the seller of a Utah ranch, who said in a civil lawsuit that he accepted Nikola stock options as part of the purchase price based on the former CEO’s claims about the company.
Nikola has spent more than $20 million on Milton’s legal defense so far, according to its public filings.
The company went public in June 2020 through a reverse merger with VectoIQ Acquisition Corp. Nikola’s market value topped $33 billion that month, but has since fallen below $3 billion.
Nikola agreed in December to pay $125 million to settle U.S. Securities and Exchange Commission’s claims that the company defrauded investors by misleading them about its products, technical advancements and commercial prospects.