New York, NY (December 18, 2023): Former Nikola founder and CEO Trevor Milton was sentenced to four years in prison Monday after being convicted of misleading investors about the company’s hydrogen and electric truck technology. The sentence marks a significant drop from the 11-year term prosecutors requested, but still signifies a major fall from grace for the once-celebrated entrepreneur.
Milton, who founded Nikola in 2014, was found guilty in October 2022 of one count of securities fraud and two counts of wire fraud for making false and misleading statements about the company’s progress. During the trial, prosecutors presented evidence that Milton had exaggerated the capabilities of Nikola’s trucks, claiming they were operational when they were not, and that the company had built its own batteries and key components when it had actually sourced them from third parties.
“Mr. Milton’s conduct was intentional, it was knowing, and it was repeated,” said Damian Williams, U.S. Attorney for the Southern District of New York. “He lied to investors and the market, and in the process, he caused millions of dollars in losses.”
Milton’s defense argued that he was a passionate visionary who overenthusiastically promoted his company but had never intended to defraud anyone. However, Judge Edgardo Ramos rejected this argument, stating that “the law does not grant a pass for good intentions.”
In addition to the prison sentence, Milton was also ordered to pay a $1 million fine and forfeit a ranch he purchased with some of the ill-gotten gains.
The Nikola saga has been a major blow to the electric vehicle industry, casting a shadow over the sector and raising concerns about potential investor risks. Nikola’s share price has plummeted since the fraud charges were filed, dropping from a peak of $60 in June 2020 to its current price of around $1.
While Milton’s sentence likely won’t fully erase the damage done to Nikola and its investors, it sends a clear message that deliberate deception in the business world will not be tolerated. The case serves as a cautionary tale for both founders and investors, emphasizing the importance of transparency and accountability in the pursuit of innovation.
Key Takeaways:
- Trevor Milton, founder of electric truck company Nikola, sentenced to four years in prison for defrauding investors.
- Sentence significantly lower than prosecution’s request but still marks a major fall for Milton.
- Case highlights dangers of misleading investors in the rapidly growing electric vehicle sector.
- Nikola’s stock price remains depressed following fraud charges.
