Nikola Founder Trevor Milton Indicted On Fraud Charges

A grand jury has indicted Trevor Milton, founder of the electric vehicle manufacturer Nikola Corp., NKLA with three counts of fraud.

What Happened: The U.S. Attorney's Office for the Southern District of New York accused Milton of generating false and deceptive claims on "nearly all aspects of the business" from November 2019 through September 2020, according to an indictment that was unsealed Thursday.

Among the issues raised in the indictment are the unveiling of Nikola's electric tractor trailer truck, which needed to be plugged into a wall while the company's staff remotely operated its headlights.

The indictment also cited a promotional video that showed a Nikola vehicle in motion when, in fact it was filmed rolling down a hill after being pushed into motion before the camera rolled.

How It Happened: Problems with Nikola were first raised by Hindenburg Research last September in a report published two days after the company announced a partnership with General Motors Company GM. Hindenburg accused Milton of lying about the company's technological prowess, stating he created "intricate fraud built on dozens of lies."

Hindenburg tweeted its praise to prosecutors, commending "regulators for acting expediently to protect investors and hold Milton accountable for his egregious lies. We also want to congratulate the brave whistleblowers who came forward when they saw something wrong, despite immense pressure to stay silent. This day would not have happened without their contributions."

The grand jury indictment stated that Milton's actions resulted in investors losing hundreds of thousands of dollars due to his dishonesty.

The indictment also said Milton needed to forfeit all property "traceable to the commission of said offenses" created since Nikola went public in June 2020.

Milton resigned from his leadership role last September.

NKLA Price Action: Nikola shares were down 7.4% at $13.14 at last check in premarket trading Thursday. 

Photo: Nikola Corporation.