EV Startup Nikola Agrees To $125 Million Settlement
Wednesday December 22, 2021. 02:00 PM , from Slashdot
Long-time Slashdot reader bird writes: Without admitting wrong-doing, would-be electric truck maker Nikola has agreed to a $125,000,000 settlement to settle charges that it defrauded investors with false claims about their EV vehicle technology. You may recall the video of a supposedly electric-powered truck that was later admitted to be powered not by a motor but rather by gravity? Nikola. The Seattle Times provides additional details about the settlement: Nikola violated the antifraud and disclosure control provisions of the federal securities laws, the Securities and Exchange Commission said Tuesday. In July the founder and one-time chair of Nikola, Trevor Milton, was freed on $100 million bail after pleading not guilty to charges alleging he lied about the company. The U.S. Attorney's Office in Manhattan, New York, charged Milton, 39, with two counts of securities fraud and wire fraud. He resigned as chairman in September. The SEC said in its order that Milton embarked on a public-relations campaign aimed at inflating and maintaining Nikola's stock price before the company had produced a vehicle. The SEC also found that Milton misled investors about Nikola's technological advancements, in-house production capabilities, hydrogen production, truck reservations and orders, and financial outlook. In addition, it found that Nikola misled investors by misrepresenting or omitting information about the refueling time of its prototype vehicles, as well as the economic risks and benefits associated with a potential partnership with General Motors.
Nikola, based in Phoenix, didn't admit or deny the SEC's findings. The company did agree to cease and desist from future violations and to the $125 million penalty. Nikola also agreed to continue cooperating with the SEC's ongoing investigation. The order also establishes a fund to return penalty proceeds to investors who were affected. 'We are pleased to bring this chapter to a close as the company has now resolved all government investigations,' Nikola said in a statement. We will continue to execute on our strategy and vision to deliver on our business plan.'
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