Trevor Milton, the founder and former CEO of the electric carmaker Nikola, was found guilty last year of defrauding investors, CNBC reports. His trial, and that of Elizabeth Holmes of Theranos, were seen as tests for whether start-up founders could be held liable for exaggerated claims to promote their company’s prospects.
Nikola in December 2021 agreed to pay $125 million to settle a lawsuit by the SEC.
The truck-maker, which was founded by entrepreneur Milton, went public via a SPAC reverse merger in June 2020 with VectorIQ Acquisition. Shares in the company took off that summer, riding investor enthusiasm for all things EV. Investors pushed the value at one point to above $34 billion—a market cap greater than Ford and Stellantis—even though Nikola had never made an automobile for sale.
A few months later, activist short seller Hindenburg Research dropped a bombshell on the markets, revealing the company’s prototype hydrogen-powered Nikola One fuel-cell semi had been rigged for a presentation, making it look like it was driving, but it was really just rolling downhill with the help of gravity. Following the revelation, Nikola shares bombed and never recovered. Read more.
