Nikola Founder Found Guilty Of Fraud
The founder of electric pickup manufacturer Nikola faces 20 years in prison after being found guilty of fraud. Trevor Milton stepped down from his role as chief executive of the electric vehicle manufacturer in 2020 after the fraud allegations came to light. The company is known for its electric semi-truck and the Badger electric pickup, but it has also worked on a number of hydrogen and electric infrastructure projects. If you haven't guessed from the company's name and output, it was set up as a direct competitor to EV giant Tesla, though Tesla's controversial CEO is currently doing a lot better than Milton is.
Milton's resignation wasn't the only difficulty Nikola encountered in 2020. GM yanked a $2 billion investment from the firm, the Badger pickup truck went extinct, and a major truck deal between the company and Republic Services collapsed. Republic initially put an order in for 2,500 vehicles, which could eventually increase to 5,000, and both companies were going to work together on an electric refuse truck.
Theoretically, such a truck would have a huge market with various municipalities across the U.S. looking to go carbon neutral. Most refuse trucks have very large engines and require diesel fuel, which is harsh on the environment. When announcing the deal had been terminated, Republic said that "both companies determined that the combination of the various new technologies and design concepts would result in longer than expected development time, and unexpected costs."
Milton faces up to two decades in prison
A federal jury found that Trevor Milton had defrauded investors by allegedly making false statements about the products and technologies his company had access to. Bloomberg reports that Milton was found guilty of one count of securities fraud and two counts of wire fraud, while beating one of the more serious securities fraud charges. As other tech industry CEOs have discovered, the things you say on Twitter can land you in a courtroom. Milton used the social media platform to make many of the claims that might put him behind bars. Federal prosecutors claim that Milton lied about "nearly all aspects of the business" after it was announced his company's stock would be publicly listed (via CNBC).
Nikola went public in June 2020 and had a higher value than Ford at one point. As he was and still is the biggest shareholder, Milton's own net worth went up with the share price — peaking in the billions — though it has now dropped back into the millions. Milton will find out exactly how much time he will spend in prison when he returns to court for sentencing in January 2023.