Nikola Agrees to Pay $125 Million SEC Fine; Delivers First Electric Semis
According to CNN Business, electric vehicle (EV) startup Nikola has agreed to pay a $125 million USD fine to settle charges brought by the U.S. Securities and Exchange Commission (SEC) alleging that the company let its founder, Trevor Milton, defraud investors.
Milton resigned as executive chairman of Nikola in September 2020 after several deceptions pertaining to the company’s progress with product development and pre-order numbers were uncovered. The former chairman was charged with securities fraud earlier this year, which he still faces along with federal criminal charges.
“As the order finds, Nikola is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” said Gurbir Grewal, director of the SEC’s Division of Enforcement.
“This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.”
Nikola did not admit to any wrongdoing under the terms of the settlement, which mainly serves to wash the company’s hands of the debacle. The EV upstart says it will be seeking reimbursement from Milton, who still owns around $458 million USD worth of stock in the company, for costs and damages incurred as a result of the investigations.
“We are pleased to bring this chapter to a close as the company has now resolved all government investigations,” said Nikola in a statement. “We will continue to execute on our strategy and vision to deliver on our business plan.”
Nikola on Friday delivered its very first Nikola Tre all-electric semi-trucks to Total Transportation Services Inc. (TTSI), one of the largest trucking companies in Southern California, during an event attended by a number of politicians. The deliveries mark the beginning of real-world pilot testing for Nikola’s EVs.
Nikola, like most other EV makers, saw its share price take a tumble on Monday after Democratic West Virginia Senator Joe Manchin effectively killed U.S. President Joe Biden’s Build Back Better plan, which would have doled out up to $12,500 USD in tax credits to plug-in vehicle buyers.