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Tags: Climate Change | Financial Markets | Infrastructure | Money | Nikola fraud case

Judge Rejects Nikola Founder's Bid to Dismiss or Move Criminal Fraud Case

U.S. attorney general for the southern district of New York
Audrey Strauss, U.S. Attorney for the Southern District of New York, announces at a news conference on July 29, 2021 that Trevor Milton, founder and executive chair of Nikola Corp., surrendered in New York to face charges he lied about the electric and hydrogen-powered truck startup, duping some financially struggling novice investors looking for income during the pandemic. (AP)

Monday, 15 November 2021 02:04 PM

A U.S. judge on Monday refused to dismiss a federal indictment charging Nikola Corp's billionaire founder Trevor Milton with defrauding investors about the electric- and hydrogen-powered truck maker's technology.

U.S. District Judge Edgardo Ramos rejected Milton's claim that he should not have been indicted in New York for securities and wire fraud because his alleged lies were in Arizona and Utah, where he lives.

The Manhattan-based judge said Milton, 39, could be tried in New York if he traded Nikola stock on Nasdaq and communicated false statements to that state.

Ramos said other factors also supported keeping the case in New York despite Milton's wish to care at home for his wife, who according to court papers has an autoimmune disorder and other "severe" health issues.

Lawyers for Milton did not immediately respond to requests for comment. They have called the indictment "legally deficient" and plan to seek a dismissal on substantive grounds.

Nikola has not been accused of wrongdoing. Authorities said Milton used a blitz of social media posts, and TV and podcast interviews to drive up Nikola's stock price over nearly a year.

SPACs

Prosecutors said he wrongly claimed that Nikola had built an electric- and hydrogen-powered pickup from the "ground up," internally developed batteries he knew it was buying elsewhere, and was making progress on a truck prototype he knew did not work.

Milton founded Phoenix-based Nikola in 2014 and was chief executive until June 2020, when it went public after merging with a special-purpose acquisition company (SPAC).

SPACs, a burgeoning market, are investment vehicles that let sponsors take private companies public faster than through initial public offerings, but which critics say are prone to conflicts of interest and shoddy due diligence.

Nikola and other vehicle startups have used SPACs in the hope of commanding high market valuations, like Elon Musk's Tesla Inc.

Prosecutors are also investigating electric truck maker Lordstown Motors Corp about its SPAC and statements about vehicle pre-orders.

The case is U.S. v Milton, U.S. District Court, Southern District of New York, No. 21-cr-00478.

© 2022 Thomson/Reuters. All rights reserved.


StreetTalk
A U.S. judge on Monday refused to dismiss a federal indictment charging Nikola Corp's billionaire founder Trevor Milton with defrauding investors about the electric- and hydrogen-powered truckmaker's technology.
Nikola fraud case
340
2021-04-15
Monday, 15 November 2021 02:04 PM
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