Nikola Corporation (NASDAQ: NKLA) founder and former executive chairman Trevor Milton has been charged with securities and wire fraud for allegedly making false and misleading statements regarding the company’s products and technological accomplishments.’
The stock price of Nikola declined more than 15% to $12.03 per share.
The Securities and Exchange Commission (SEC) filed a civil lawsuit against Milton in a federal court in New York on Thursday. The Manhattan U.S. Attorney’s Office filed a parallel criminal complaint against him.
Milton surrendered to law enforcement authorities on Thursday morning. He pleaded not guilty was released on a $100 million bail.
The SEC and the Manhattan U.S. Attorney’s Office alleged that Milton defrauded investors by repeatedly misleading them about the development of Nikola’s products and technology. Milton allegedly used social media, print, and his appearances and interviews on television and podcasts to carry out his scheme to defraud investors by persuading them to buy Nikola shares. Milton is the largest stockholder of Nikola.
Milton sold a version of Nikola that was far from reality
In the SEC complaint, the federal securities regulator alleged the Milton promoted and sold a version of Nikola that was far from reality. He targeted a group of investors whom he referred to as “Robinhood investors.”