Nikola Corp.’s founder Trevor Milton was sentenced to four years in prison for making false and misleading statements to retail investors to drive investor demand. He was also fined $1 million, and three years of supervised release.
Judge Edgar Ramos reportedly allowed Milton to remain free on bail while he appeals his conviction.
The sentence follows a verdict in October 2022, in which Milton, the former Executive Chairman and CEO of Nikola, was found guilty on two counts of wire fraud and one count of securities fraud. Under federal sentencing guidelines for such crimes, he had faced a recommended sentence of 60 years in prison.
In a statement, U.S. Attorney’s Office, Southern District of New York, stated that Milton engaged in securities and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by the company he founded. Milton was previously convicted after a one-month trial before Judge Ramos.
U.S. Attorney Damian Williams said, “Trevor Milton lied to investors again and again — on social media, on television, on podcasts, and in print. But today’s sentence should be a warning to start-up founders and corporate executives everywhere — ‘fake it till you make it’ is not an excuse for fraud, and if you mislead your investors, you will pay a stiff price.”
In the U.S. District Court in Manhattan, prosecutors reportedly were demanding 11 years sentence, asking the judge to take into account Milton’s profound denial of accountability and insistence on blaming others.
Meanwhile, Milton’s attorneys were seeking a non-jail sentence of probation. Milton reportedly told judge before being sentenced that he did not intend to harm anyone and that he did not commit those crimes levied against.
According to the U.S. Attorney’s Office for the Southern District of New York, restitution will be determined at a future proceeding.
It was in June 2020 that the electric and hydrogen-powered truck maker went public through a deal with a special purpose acquisition company. In 2021, the company agreed to pay $125 million to settle civil charges brought by the U.S. Securities and Exchange Commission.
Following the news, Nikola shares fell nearly 10 percent on Monday’s regular trading on Nasdaq. However, the shares are gaining around 2.5 percent in the pre-market activity.
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