Nikola Founder’s Bombshell Fraud Charges May Hold Warning For Tesla’s Elon Musk
Let's skip the unsubstantiated innuendoes:
"Federal prosecutors indicted Nikola Corp. founder Trevor Milton this week for fraudulent statements in public appearances and on social media that misled investors about the market-readiness of the electric truck startup’s products and technology. In doing so, stock regulators also appeared to aim a veiled warning at another, higher-profile tech executive with a history of problematic social media comments: Elon Musk, Tesla’s billionaire CEO.
Milton, 39, adopted an outspoken style to tout Nikola as it transitioned from obscure startup to a Nasdaq-traded company via a 2020 SPAC merger. He echoed Musk’s bombast and promotional techniques for Tesla. In Milton’s case, that’s proven to be an unwise choice. The U.S. Attorney’s Office in Manhattan charged him on July 29 with two counts of securities fraud and one count of wire fraud. Milton pled not guilty to the charges later that day and was freed on $100 million bail. The Securities and Exchange Commission also filed a civil suit against him for securities fraud. . .
Despite its volatile history, including brushes with bankruptcy in 2008 and 2017, Tesla has begun to thrive, posting eight consecutive quarters of net income, expanding global sales and becoming the world's most valuable automaker with a $680 billion market capitalization. The brand’s success has brought a rush of EV startups, including Fisker, Lucid, Rivian and Lordstown Motors, each seeking to raise billions of dollars to get their rival cars and trucks into production. . .This week’s warning from stock regulators probably doesn’t indicate a re-examination of Musk’s past comments, said John Coffee, a professor of business law at Columbia University. “The SEC will probably only sue Musk for future statements, not past ones.”
. . .Milton’s claims about Nikola were certainly outrageous. Among others included in the indictment, he falsely stated in 2016 that a non-functioning hydrogen truck prototype was driveable; he oversaw the release of a misleading video of a prototype truck that was just rolling down a hill, not operating under its own power; he’d said the company was already producing hydrogen fuel when it wasn’t; and tweeted that the Badger pickup would include a built-in drinking fountain with water produced from its hydrogen fuel cell system.
“Milton lied about nearly every aspect of his business,” Manhattan U.S. Attorney Audrey Strauss said on Thursday.
“I do not think Musk has approached the reckless absurdity of Milton with his statements about producing hydrogen and rolling a non-functional truck downhill,” said Coffee. . .
How Mormon-raised Nikola founder Trevor Milton who quit amid fraud claims at the electric truck start-up went from college-dropout to billionaire after being inspired by mission trip to Brazil and set a Utah real-estate record when he bought $32.5M ranch
The Nikola founder, 39, stepped down Sunday amid reports the Justice Department will probe the company
Milton who has an estimated net worth of $3.2 billion, was raised Mormon alongside a brother and 3 sisters
He is thought to have married wife Chelsea in Wyoming in 2017, calling it 'the biggest day of my life'
Milton's mom died of cancer when he was 14; he has described the pressure that put his family under
But he has also so far avoided much of the spotlight, keeping his social media pages private
His Instagram profile reads: 'Husband to an amazing wife, Entrepreneur, Airplane Pilot & Dog Lover'
In November last year he set a Utah real-estate record, spending $32.5million on 2,670 acre ranch
Milton, 39, adopted an outspoken style to tout Nikola as it transitioned from obscure startup to a Nasdaq-traded company via a 2020 SPAC merger. He echoed Musk’s bombast and promotional techniques for Tesla. In Milton’s case, that’s proven to be an unwise choice. The U.S. Attorney’s Office in Manhattan charged him on July 29 with two counts of securities fraud and one count of wire fraud. Milton pled not guilty to the charges later that day and was freed on $100 million bail. The Securities and Exchange Commission also filed a civil suit against him for securities fraud. . .
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