Nikola Corp. founder Trevor Milton appeared in court in New York, the United States, on Monday, September 12, 2022.
Stephen Young | Bloomberg | Getty Images
Nikola Founder Trevor Milton will be sentenced in a New York court on Monday on three charges related to the troubled maker of electric and hydrogen trucks defrauding investors.
Milton was convicted in October 2022 of two counts of wire fraud and one count of securities fraud. He faces up to 60 years in prison. However, New York prosecutors last week recommended an 11-year prison sentence.
In June 2020, Milton took Nikola public in a deal with a special purpose acquisition company and became a billionaire overnight. The company was quickly considered one of the most promising electric vehicle startups, and was valued at more than $30 billion at its peak, until short-seller Hindenburg Research uncovered allegations of false and misleading statements. .
Prosecutors on Tuesday compared Milton to disgraced Theranos founder Elizabeth Holmes, who was sentenced last year to more than 11 years in prison for defrauding investors in the blood-testing startup.
“Just like Holmes lied about the blood analyzer Theranos built, Milton lied about the operability of the Nikola One semi truck.” prosecutors wrote U.S. District Judge Edgardo Ramos will decide Milton’s sentencing.
Milton tried to distinguish himself from Holmes, whose company is private. He argued that “Nikola remains a real business and Theranos is not,” according to court documents.
Milton, the company’s largest shareholder, resigned as Nikola’s executive chairman in September 2020. After the Hindenburg report described the company as a house of cards built by Milton, he resigned from Nikola during an internal investigation.
Nikola’s stock price has plummeted since Milton resigned, and the company has been unable to retain top executives. Nikola Chairman Stephen Girsky’s SPAC takes company public, Appointed CEO in August.
Nikola’s stock recently traded below $1, with a market capitalization of approximately $327 million.
Nikola was one of the first well-known companies to go public through a SPAC. Before the SEC cracked down on the practice, it inspired hundreds of other startups to do the same.
A SPAC is a public company with no real assets other than cash. They are established as investment vehicles with the sole purpose of raising capital and then finding and merging with private companies.
This is a development story. Please check back for other updates.
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