Trevor Milton, the founder of electric and hydrogen-powered truck manufacturer Nikola, has been sentenced to four years for securities fraud.
The sentencing comes after a jury found Milton guilty of intentionally deceiving investors about the company’s technological capabilities.
Trevor Milton, Sentence for Securities Fraud
The federal prosecutors in Manhattan accused Milton of making false statements, including claiming that Nikola had developed a pickup truck from the ground up, creating its own batteries (while actually purchasing them), and touting early success with the non-functional Nikola One semi-truck.
These fraudulent activities misled investors and contributed to a false portrayal of the company’s achievements.
Judge Edgar Ramos, presiding over the case in federal court in Manhattan, handed down the four-year sentence and remarked that he believed the jury’s decision was accurate.
Despite the severity of the charges, Milton was allowed to remain free by bail pending an appeal of his conviction.
During the sentencing hearing, prosecutors argued for an 11-year prison term, citing the need for a strong message that honesty is crucial when entrepreneurs and corporate executives discuss their companies.
Matthew Podolsky, a prosecutor, emphasized the importance of accountability in the business world. Milton’s defense team argued for probation, asserting that any misrepresentations were a result of his “deeply held optimism” about Nikola.
They also highlighted differences between Milton’s case and that of Elizabeth Holmes, founder of Theranos, who received a prison sentence for defrauding investors in her blood-testing startup.
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Nikola Founder’s Legal Battle and the Argument for Probation
In a lengthy address before the sentencing, Milton spoke about his family’s rural upbringing and quoted Bible verses.
He maintained his innocence, stating that he did not intend to harm anyone and also did not commit the crimes attributed to him. While Judge Ramos acknowledged the distinction between Milton’s case and Holmes’s, he rejected the argument that Milton’s optimistic statements were harmless.
Ramos emphasized that good intentions do not exempt individuals from legal consequences. Milton was convicted in October 2022 on one count of securities fraud and two counts of wire fraud.
Nikola, as a company, settled civil charges brought by the US Securities and Exchange Commission in 2021, agreeing to pay $125 million.
The fallout from these legal challenges has taken a toll on Nikola’s stock value, which currently trades for less than $1, a significant decline from its peak of over $60 in June 2020.
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