Founder of electric truck maker Nikola lied to 'dupe innocent investors', US court hears

Nikola has spent more than $20m on Mr Milton's legal defense so far, according to its public filings. File picture: iStock

Nikola founder Trevor Milton became a billionaire by lying to investors about the most important aspects of his low-emission vehicle company, a prosecutor told jurors as Mr Milton's fraud trial began on Tuesday.

Prosecutors have said Mr Milton sought to deceive investors about the electric and hydrogen-powered truck maker'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".

"He lied to dupe innocent investors into buying his company’s stock," prosecutor Nicolas Roos said in US District Court in New York. "On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight."

Mr 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 Mr Milton's statements.

US District Judge Edgardo Ramos on Monday oversaw the selection of a panel of 12 jurors and four alternates in federal court in Manhattan. Mr Milton was charged 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.

Mr 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. Mr 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 $20m on Mr Milton's legal defense so far, according to its public filings.

Nikola agreed in December to pay $125m to settle US Securities and Exchange Commission's claims that the company defrauded investors by misleading them about its products, technical advancements and commercial prospects. 

Reuters