Electric truck maker Nikola Corporation has agreed to pay $125 million to the US Securities and Exchange Commission to settle civil charges after misleading investors about its products, technical advancements, and commercial prospects.
The company agreed to pay the fine in five installments over two years, on condition that the settlement resolves and concludes all government investigations of Nikola. The first installment will be paid by the end of 2021, and the remaining installments will be paid semiannually through 2023.
The SEC accused the EV manufacturer of violating US securities laws with numerous misleading statements about in-house production capabilities, reservation book, and financial outlook.
The statements were made on social media from March to September 2020 by Nikola founder and former CEO Trevor Milton. The settlement follows civil and criminal charges filed in July against Milton for repeatedly misleading investors about the company's technology and capabilities.
As a result of his misconduct, Nikola reaped “tens of millions of dollars,” the SEC order reads. Having lost a bid to dismiss or move the case, Milton is still battling those charges in court.
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According to the SEC, Nikola founder’s misleading statements aimed at inflating share prices started even before Nikola had produced a "single commercial product or had any revenues from truck or hydrogen fuel sales.”
“As the order finds, Nikola Corporation is responsible both for Milton's allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company's business and technology. This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.”
Gurbir Grewal, the SEC's enforcement director
While Nikola did not admit or deny the SEC’s findings, it has agreed to cooperate with ongoing litigation and investigation.
In a statement, the company says it remains focused on meeting previously stated key milestones, including delivering trucks to customers, as well as expanding manufacturing facilities and its sales and service network. Nikola also suggests that it is suing Trevor Milton.
“The company has taken action to seek reimbursement from its founder, Trevor Milton, for costs and damages in connection with the government and regulatory investigations.”
Nikola press release
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