Trevor Milton, the Nikola Corp. founder who enticed auto-industry leaders and investors with his promise for a revolution in electric trucks, faces a securities-fraud trial beginning this week on allegations that he lied about his company’s development of environmentally friendly technology.
Federal prosecutors in Manhattan last year accused Milton of running a scheme to enrich himself and boost his stature as an entrepreneur by falsely hyping Nikola’s NKLA, +3.24% prospects and duping nonprofessional investors, including stock-market novices. He was indicted on two counts of wire fraud and two counts of securities fraud. Jury selection begins Monday.
“In order to drive investor demand for Nikola stock, Milton lied about nearly every aspect of the business,” then-U.S. Attorney Audrey Strauss said when announcing the charges.
Milton, who is 40 years old, has pleaded not guilty. He resigned from Nikola in 2020, several days after short seller Hindenburg Research released a report alleging dozens of misrepresentations that Milton had made about the business, including rolling an undrivable truck down a hill to make it appear functional in a marketing video.
During a pretrial hearing last week, lawyers for Milton said they would argue their client acted in good faith and didn’t intend to defraud anyone. Milton might have used certain terms like “prototype,” “functional,” and “show car” differently than some investors understood them, defense lawyer Marc Mukasey said. “There is a linguistics aspect to this,” Mukasey said.
An expanded version of this report appears in WSJ.com.
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