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Founder of Electric Truck Company to Face Sentencing for Fraud

Trevor Milton, the founder and former chief executive of electric truck company Nikola, is set to be sentenced on Monday after being found guilty of securities and wire fraud. Milton is facing significant prison time, reportedly up to 11 years, and a $5 million fine.

The charges against Milton stem from claims he made about Nikola’s emissions-free long-haul trucks, billions of dollars worth of binding orders, and low-cost hydrogen fuel, which prosecutors say were all false. Investors have been left with heavy losses, with Nikola’s stock losing 99 percent of its value.

Milton is just one example of a new wave of electric vehicle start-ups attracting significant investment without generating profits or producing many cars or trucks. Companies like Canoo, Lordstown Motors, and Lucid Motors have struggled to meet safety standards and costs, leading to substantial financial losses for investors.

Many of these start-ups listed themselves on the stock exchange by merging with special purpose acquisition companies (SPACs) to avoid conventional initial public offerings of stock, resulting in significant losses for investors.

Several of the electric vehicle start-ups also became targets of short sellers, who make money by betting that a stock price will decline. Hindenburg Research and other short sellers have exposed overvalued stocks and instances of corporate malfeasance.

Some companies, like Lordstown and Faraday Future, have faced accusations of fabricating orders and exaggerating achievements and prospects. Faraday Future has admitted to misleading investors and is currently under investigation by the Securities and Exchange Commission and the Department of Justice.

Even companies that have managed to produce thousands of cars, like Fisker and Lucid Motors, have seen steep declines in their stock prices.

As for Mr. Milton, he is accused of engaging in a sustained scheme to take advantage of nonprofessional investors, and faces significant prison time and a hefty fine. Milton reportedly spent millions of dollars on luxuries like a private jet and an estate in the Turks and Caicos Islands after selling some of his Nikola shares. According to prosecutors, Nikola investors have lost more than $660 million, disputing claims that the loss could be far less and possibly zero.

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