Nikola founder Trevor Milton pleads not responsible of fraud allegations


Trevor Milton, founder of Nikola Corp., is leaving federal court in New York, USA on Thursday, July 29, 2021.

Angus Mordant | Bloomberg | Getty Images

Nikola founder Trevor Milton pleaded not guilty to fraud allegations in a Manhattan courtroom Thursday afternoon after federal prosecutors accused him of misleading investors about the electric vehicle startup’s capabilities and technologies.

Milton, who stepped down as chairman in September, was released with a $ 100 million bond secured against two of his $ 40 million properties in Utah. He is prohibited from contacting investors and the court has received travel restrictions. It was his first big gig since leaving the company and deleting his social media accounts.

A state grand jury accused Milton of triple criminal fraud for lying about “almost every aspect of the business” to encourage the electric vehicle startup’s stock sales, an indictment unsealed Thursday.

Milton’s lawyers vehemently defended his innocence.

His legal team, led by Brad Bondi, said Milton was “wrongly charged following a flawed and incompetent investigation,” and that justice will not be served until after his discharge, a statement emailed Thursday said.

Read the full statement from Milton’s Legal Department:

Trevor Milton is innocent; This marks a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be appalled.

Trevor Milton is an entrepreneur with a long-term vision to help the environment by reducing carbon emissions in the trucking industry.

Mr Milton was wrongly indicted following a flawed and incomplete investigation in which the government ignored critical evidence and failed to interview key witnesses.

From the start, this was an investigation in search of a crime. Justice has not been served by government action today, but it will be when Mr. Milton is exonerated.

John Coffee, a professor of securities law at Columbia University, said it was likely in Milton’s best interest to find a deal. He said the federal prosecutors’ allegations were “not nuanced, which can be reasonably argued about.”

“If he’s reasonable, Mr. Milton should get a bargain,” he said in an email to CNBC.

That probably won’t happen, according to Yale law professor Jonathan Macey, who works as a paid advisor to Milton’s defense team. He believes Milton will “build a strong defense,” he said.

Milton “took some steps, but in general he was telling the truth,” Macey told CNBC. “He’s an optimistic entrepreneur. People who are CEOs or CEOs of companies, which of course he was … are often very optimistic and I think that kind of occupational risk is pursued in this case.”

Milton has been charged with securities fraud on two counts and one with wire transfer fraud. The number of securities fraud cases is linked to a maximum sentence of 20 or 25 years in prison. Counting transfer fraud is punishable by a maximum penalty of 20 years in prison.

The grand jury said Milton should forfeit all property “traceable to the commission of these crimes,” which would likely include the more than $ 1 billion it made when Nikola went public in June 2020.

Nikola stock plunged 15.2% on Thursday to $ 12.03 per share. That’s a steep drop from its all-time high of $ 93.99 on June 9, 2020, days after the company went public.

The US Securities and Exchange Commission on Thursday also brought charges of securities fraud against Milton. The SEC asked the U.S. District Court for the Southern District of New York City to permanently ban him from serving as an officer at a company that issues securities, siphoning off any ill-gotten gains, and paying a fine.