Nikola Corp NKLA founder Trevor Milton is set to serve time in prison on federal charges after a jury found him guilty of misleading investors.
What To Know: Milton on Monday was sentenced to four years in prison following a fraud conviction in which a jury decided that he lied to investors about Nikola's technology capabilities.
Milton was originally found guilty in October 2022 and faced up to 60 years in prison, but last week, New York prosecutors recommended a sentence of 11 years. At a hearing in federal court in Manhattan on Monday U.S. District Judge Edgar Ramos issued Milton a four-year sentence, per Reuters.
After taking Nikola public via SPAC in early 2020, Milton claimed Nikola had built a truck from the "ground up" using its own batteries. Federal prosecutors determined that Milton knew the company was actually buying the batteries from a third party. They also determined that he knew the "Nikola One" semi-truck did not work, even though company videos made it seem like it was running on its own power.
Prosecutors determined that Milton aimed to inflate the company's share price and his own net worth as Nikola's largest shareholder at the time.
At its peak, Nikola was valued at more than $30 billion in public markets before short-seller Hindenburg Research highlighted several statements from the company that appeared to be false and misleading. Milton stepped down as executive chairman of the embattled electric and hydrogen vehicle maker in September 2020.
Nikola shares are currently trading with a market cap of approximately $1.05 billion, according to data from Benzinga Pro.
NKLA Price Action: Nikola shares are down more than 58% since the start of the year. The stock was down 1.34% Monday afternoon at 89 cents at the time of publication.
Photo: courtesy of Nikola.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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