CEO and founder of US Nikola, Trevor Milton speaks at the presentation of her new trucks with full electric and hydrogen fuel cells in collaboration with CNH Industrial, at an event in Turin, Italy, December 2, 2019.
Massimo Pinca | Reuters
The founder of electric truck startup Nikola Motors, already under charge of fraud, is facing a new charge in connection with his purchase of a Utah ranch – a purchase he paid in part with an option to buy Nikola shares to buy.
Federal prosecutors in the Southern District of New York on Wednesday accused Trevor Milton of a new count of wire fraud for misrepresenting the state of Nikola’s company to persuade the seller of the Wasatch Creek Ranch to accept an option to buy Nikola shares to be purchased as part of payment for the ranch around April 2020.
The new count is the fourth federal indictment against Milton. In July 2021, a federal grand jury indicted Milton on three charges of criminal fraud for alleged lies about “almost every aspect of the business” in order to encourage the sale of the company’s shares in electric cars.
The option to buy Nikola shares would have allowed the ranch’s seller, Peter Hicks, to buy more than 500,000 shares of the company at what was then a discount of $ 16.50 per share.
Nikola’s share price jumped to more than $ 60 in June 2020, but fell sharply after Milton was forced out of the company in September of that year amid fraud. The stock was trading at $ 5.60 at the end of Wednesday.
Lawyers for Milton did not immediately respond to a request for comment.
Prosecutors said Milton built a complicated scheme designed to pump up the company’s shares for his own profit by lying about Nikola’s products, technology and future prospects for sales. They accuse him of using Nikola’s deal to go public through a special-purpose acquisition company to target amateur investors, some of whom have lost hundreds of thousands of dollars.
In his civil lawsuit against Milton, Hicks claimed that Milton made similar representations to persuade him to accept the stock option as payment for the ranch.
Many of the allegations regarding Milton’s false and misleading statements were first discovered by short-selling Hindenburg Research.
Milton, who is still awaiting trial, has retained his innocence. He pleaded not guilty to the criminal charges in a courtroom in New York last year.
However, after an internal investigation, Nikola said in February that it found Milton made several inaccurate statements from 2016 through the company’s IPO that offended investors in June 2020.
In December, Nikola agreed to pay the Securities and Exchange Commission $ 125 million to settle charges that deceived investors by misleading them about their products, technical capacity and business prospects.
Nikola was the catalyst for launching electric cars to go public through SPAC deals. The interest of investors in such companies went up after Tesla’s share skyrocketed to make it the most valued carmaker in the world by market capitalization in 2020.