Trendy electric truck producer Nikola agreed Tuesday to pay the Securities and Exchange Commission an incredible $125 million to settle charges that it misled investors.
The SEC claimed that the company and its founder and ex-CEO, Trevor Milton, misled investors about its trucks’ capabilities, including by sharing a video of a Nikola truck moving down a slope to imagine that it was “fully operational.”
The misleading publicity crusade helped Nikola boost its stock cost despite the fact that the company had not yet taken in a solitary dollar in income, as indicated by the SEC.
“Before Nikola had created a solitary business item or had any incomes from truck or hydrogen fuel sales, Milton set out on an advertising effort pointed toward swelling and keeping up with Nikola’s stock value,” the SEC said in a Tuesday letter. “Milton misled investors about, among other things, Nikola’s technological advancements, in-house production capabilities, reservation book, and financial outlook.”
The $125 million settlement, which Nikola told financial backers it was negotiating last month, doesn’t include the electric truck producer conceding or denying bad behavior. Milton, who left Nikola in September 2020, was separately charged with federal securities and wire fraud charges this July and has pleaded not guilty.
“This is an straightforward case. Milton lied to create famous interest for Nikola stock,” US Attorney Audrey Strauss told reporters in July.
Nikola has let financial backers know that it will look for repayment for the settlement from Milton. The settlement will be paid in $25 million portions like clockwork, with the principal installment due inside about fourteen days, as indicated by the SEC.
Nikola didn’t promptly react to a solicitation for input and Milton couldn’t be reached.
The company first went public through a SPAC deal in the summer of 2020, with its shares rising as high as $65 based on what the SEC claims were Milton’s misleading statements. It has since tanked below $10. Nikola shares were up 3.6 percent at $9.58 during premarket trading early Tuesday.
Notwithstanding electric trucks, Nikola says it’s chipping away at hydrogen fuel unit technology.