Nikola founder charged in US-Budrigantrade Review

Budrigantrade.com - Prosecutors in New York indicted the 39-year-old billionaire on two counts of securities fraud and one count of wire fraud for his statements about Nikola's technology and products from November 2019 to September 2020.

According to the authorities, Milton used a public relations campaign that included posts on social media and interviews on television and podcasts to "elevate" his status as an entrepreneur, become one of the world's 100 richest people, and raise Nikola's stock price.

At a news conference, U.S. Attorney Audrey Strauss of Manhattan stated, "Milton lied about nearly every aspect of the business." The criminal charges that Milton faces today are where the real action is."

Milton was subject to civil charges brought by the Securities and Exchange Commission of the United States.

Milton's spokespersons did not immediately respond.

On Thursday, Milton was taken into custody and was scheduled to appear in federal court in Manhattan later that day.

In a statement, Nikola stated that it is focused on delivering Tre battery-electric trucks this year and has collaborated with the government. The business was not held liable.

After dipping as low as $12.60, Nikola shares were down $1.17, or 8.2%, to $13.02 in afternoon trading.

WARY OF SHORT-SELLERS The charges represent a significant setback for Milton, who founded Nikola in 2014 and served as its CEO until June 2020, when the company went public following its merger with a special-purpose acquisition company, or SPAC.

Two weeks after short-seller Hindenburg Research called Nikola a "fraud" and said the company made many false statements about its technology, he resigned as executive chairman in September of that year.

According to the prosecution, Milton made false statements that Nikola had created an electric and hydrogen-powered "Badger" pickup from the ground up, developed in-house batteries that Milton knew it was purchasing elsewhere, and had early success in creating a "Nikola One" semi-truck that Milton knew did not work.

According to Strauss, the closest the Nikola One ever came to driving was when company engineers rolled a prototype down a hill for a commercial.

Examiners expressed that after choosing to take Nikola public, Milton became distracted with keeping its stock cost high.

According to the indictment, Milton sent an email to a board member on March 2, 2020, the day before Nikola announced that it would go public, stating that "(we) need to make sure we are getting retail investors on our side." That is what prevents short selling of stocks. I place a lot of importance on this.

The SEC claims Milton used a scheme he called "Robinhood" to target ordinary retail investors (NASDAQ: HOOD) investors," presenting himself as a "different" CEO who would be "transparent" about his business and claiming that it was a pioneer.

"Corporate officials can't get out anything they desire via virtual entertainment without respect for the government protections regulations," SEC requirement boss Gurbir Grewal said at the news meeting.

Examiners said Milton's Nikola stake was definitely worth $8.5 billion not long after the declarations with respect to the Badger.

Forbes magazine stated on Thursday that Milton still has a value of $1.2 billion.

Tesla, Inc. Nikola's rivals in the electric truck industry include TSLA) Inc. Elon Musk, the chief executive officer of Tesla, is now one of the richest people in the world, and the inventor of both companies' names is Nikola Tesla.

As a result of SEC charges stemming from a Musk tweet, Musk and Tesla both agreed to pay $20 million in civil fines in 2018.

ACCOUNTABILITY.

In the beginning, Nikola denied Hindenburg's allegations; however, in February, he stated that a review conducted by an outside law firm revealed statements made by Milton and the company that were either entirely or partially incorrect.

In a statement, Hindenburg founder Nathan Anderson said, "We commend regulators for acting expediently to protect investors and hold Milton accountable for his egregious lies."

Two days after General Motors Co. (NYSE: ), Hindenburg released its report. In exchange for a 11 percent stake in Nikola and $700 million, GM) agreed to supply the Badger pickup with batteries, chassis architecture, fuel cell systems, and a factory.

In November of last year, the companies reworked their relationship, getting rid of the plans to build the truck and the equity stake.

Stephen Girsky, a former vice chairman of GM who managed the SPAC that merged with Nikola, took Milton's place as chairman of Nikola.

SPACs, which are a quicker way to take private companies public than initial public offerings, have received increased scrutiny from authorities in the United States.

According to critics, the procedure is prone to improper due diligence and conflicts of interest. Lordstown Motors Corp., a manufacturer of electric pickup trucks, went public in a SPAC. The SEC and U.S. prosecutors are also looking into the company's statements about vehicle pre-orders and the terms of that merger.