Electric Truck Maker Nikola to Pay $125 Million in SEC Settlement Following Fake Demo

GM - back electric truck makerNikola(which famouslyadmittedone of itspromotional videoswas actually just a prototype stray down a J. J. Hill ) will ante up the Securities and Exchange Commission $ 125 million to settle charges it had defrauded its investor by lie about its product and technical capacity .

The settlement arrives a little more than one class after the SEC reportedlybeganits probe into the company over allegations the company had deceive investors about its patronage practices , and nearly five months after the means formallychargedformer CEO Trevor Milton of violating anti - fraud protections . Milton was himselfindictedby a federal grand panel this summer with three counts of deplorable shammer .

In a statement , the SEC accused Nikola of direct an expansive public relative campaign that entail billow its fund price before its products were ever quick for development .

Image: Nikola Corporation

“ The order also finds that Nikola further misled investor by misrepresenting or omitting material fact about the refueling time of its prototype vehicles , the condition of its military headquarters ’ H place , the anticipated cost and sources of electrical energy for its planned atomic number 1 product , and the economical risks and benefits associated with its speculate partnership with a leading auto maker , ” the SEC said .

Specifically , the SEC alleged Nikola outrage the antifraud and disclosure control supplying of the federal security laws . The agency has also previously taken issue with Milton ’s alive front on societal media , where he directly contacted investor and allegedly fed them lead astray information .

“ Having choose to promote Nikola through social media , Milton was oblige under the securities laws to communicate completely , accurately and truthfully , ” SEC ’s Division of Enforcement Director Gurbir S. Grewalsaidin July . In its ownstatement , Nikola ( which will neither admit nor deny the SEC ’s charges as part of the settlement ) said it ’s “ pleased to bring this chapter to a close . ” Nikola also said it would continue to cooperate with the SEC on another open investigating , which the New York Timesnotesmay be a source to divide judicial proceeding against Milton .

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Like many recent electric vehicle troupe , Nikola received a cascading wave of hype early on in its sprightliness . To put that in perspective , at one point , the company wasvaluedat $ 26 billion despite not bring in any gross . Founder Trevor Milton ’s sight for the ship’s company was so powerful that it even managed to bring in the championship of old sentry go car maker , like GM , which took a $ 2 billionstakein the caller before it had ever sold a single car . But much of that hype may have been more aspirational than literal .

Milton was push to relinquish from his place as chair and CEO of the ship’s company last year following areportby investment monetary fund Hindenburg Research that accused him of overstating Nikola ’s technological ability . ( For what it ’s worth , Hindenburg is a short - sell firm that stood togainfrom Nikola ’s plummeting stock ) . At the time , Nikola had ferventlydeniedthe allegations in the Hindenburg Research write up as , “ false and deceptive . ” Among other things , the report also lay claim Nikola relied on component sourced from other supplier despite tell investor it used its own proprietary technology .

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