Web Stories Saturday, February 24

Nikola founder Trevor Milton was sentenced Monday to four years in prison for lying to investors about the company’s hydrogen and electric truck technology.

The sentence is significantly lower than the 11-year sentence federal prosecutors were seeking. Milton was facing up to 60 years behind bars if he was sentenced to the maximum penalty.

In October 2022, a New York jury convicted Milton on federal charges of securities fraud and wire fraud. Prosecutors in the US Attorney’s Office in the Southern District of New York had accused Milton of making false and misleading statements about “nearly all aspects of the business” as it pertained to developing electric and hydrogen-powered trucks, as well as defrauding the public through social media and podcast interviews.

Nikola, a Phoenix-based automaker focused on developing semi-trucks and off-road vehicles powered by hydrogen fuel cell technology and electric batteries, was regarded as a competitor to Elon Musk’s Tesla when it first went public in 2020, and saw its share price skyrocket. That year, it also entered into a $2 billion dollar partnership deal with General Motors.

Allegations of investor fraud later avalanched into a federal probe, an indictment and a conviction.

“Among the retail investors who ultimately invested in Nikola were investors who had no prior experience in the stock market and had begun trading during the COVID-19 pandemic to replace or supplement lost income or to occupy their time while in lockdown,” the Department of Justice wrote in its indictment of Milton in 2021.

Shares of Nikola (NKLA) have since plummeted from their peak of more than $73 per share, and are currently trading under one dollar.

This is a developing story and will be updated.

CNN’s Chris Isidore contributed to this reporting.

Read the full article here


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