Nikola Founder Trevor Milton's Lawyers Seek Probation To Avoid Client Going To Jail, Claim Company Is 'Real' Unlike Elizabeth Holmes' Theranos

Convicted founder of electric truck maker Nikola Corp NKLA Trevor Milton, is reportedly making a bid to avoid jail time, with his legal counsel asserting that Milton’s case doesn’t align with that of Theranos founder Elizabeth Holmes, who was also convicted for fraud.

What Happened: Milton’s lawyers have proposed probation instead of imprisonment during his sentencing, which is scheduled for November 28, reported Reuters.

In October 2022, a federal jury in Manhattan found Milton guilty of two counts of wire fraud and one count of securities fraud. The prosecution painted Milton as a “con man,” accusing him of misleading investors about the electric and hydrogen-powered truck maker’s technology.

As per the report, Milton’s attorneys claimed that there is “not a shred of evidence” indicating that he had any malicious intent. Instead, they said that any false statements were the result of Milton’s unwavering faith in his Phoenix-based company.

As per the report, Milton’s legal team also sought to distinguish his case from that of Elizabeth Holmes, arguing that unlike Theranos which was touted as a breakthrough health technology company when it had no successful product, Nikola is a “real company with real products.” They further suggested that Holmes’ lies posed a risk to people’s health, which isn’t applicable in Milton’s case.

Why It Matters: Milton founded Nikola in 2015. The company was listed on Nasdaq in 2020 by merging with a SPAC called VectoIQ Acquisition Corporation. 

In the recent third quarter, Nikola's gross loss bloated to $125.5 million from $30.2 million a year earlier, while the expanded adjusted EBITDA loss widened to $188.6 million from $107.9 million. Adjusted EPS loss of 30 cents was greater than the feared 14 cents. 

After several incidents of fire were reported with Nikola battery electric trucks (BEV) since June, Nikola issued a recall for all the vehicles in the market between dealers and customers in August.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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