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Trevor Milton, the founder of electric truck startup Nikola, was charged Thursday on three counts of fraud stemming from federal prosecutors' investigation of allegedly inaccurate or misleading statements the company made to investors.
Driving the news: The Securities and Exchange Commission — which filed a complaint alongside a grand jury indictment from federal prosecutors in Manhattan — accused Milton of engaging in a "fraudulent scheme to deceive retail investors about Nikola’s products, technical advancements, and commercial prospects for his own personal benefit."
- "Milton did so primarily by leveraging his social media presence and frequent appearances on television and podcasts to flood the market with false and misleading information about Nikola," the SEC alleges.
- The grand jury ordered Milton to forfeit all property "traceable to the commission of said offenses," which could amount to more than $1 billion, according to CNBC. He has surrendered to authorities.
How we got here: Nikola, which has never produced an electric truck, saw its value soar after going public in June 2020.
- GM took an 11% stake in Nikola in September 2020 and agreed to build its planned pickup truck and supply tech for its products.
- GM then reversed course and said it would no longer take an equity stake in Nikola or build its pickup, after short-seller Hindenburg Research issued a scathing report calling the company an "intricate fraud" based on "lies" by Milton.
- Milton stepped down after the SEC and the U.S. Attorney’s Office for the Southern District of New York launched investigations into Hindenburg's allegations.