U.S. District Judge Diane Humetewa has ruled that Trevor Milton, the founder of electric truck maker Nikola, must pay the company USD 167.7 million for making false and misleading statements to the public. This decision, handed down on Monday in Phoenix, Arizona, marks a crucial turning point in the ongoing saga surrounding the embattled entrepreneur and his former company.

Milton, who was sentenced to four years in prison in December 2023 following his conviction on fraud charges, now faces this substantial financial penalty in addition to his criminal sentence. The ruling upholds a divided arbitration panel's November 2023 award in Nikola's favour, reinforcing the severity of Milton's actions and their impact on the company he founded.

Judge Humetewa's decision hinges on the interpretation of a separation agreement that Milton signed upon resigning as Nikola's chief executive in September 2020. The judge determined that the arbitration panel acted within its authority when interpreting this agreement, thereby validating the financial award.

The breakdown of the USD 167.7 million penalty is particularly noteworthy. Milton is required to pay USD 121.25 million, representing 97% of Nikola's USD 125 million fine resulting from a settlement with the U.S. Securities and Exchange Commission (SEC) in a civil fraud case. The remaining USD 46.5 million covers Nikola's legal fees and expenses incurred during the proceedings.

Milton's legal team contested the award, arguing that it was excessive and amounted to "rough justice." They claimed that the arbitration panel had failed to consider the "relative fault" of other Nikola executives, directors, and employees in the matter. However, Judge Humetewa found the panel's analysis to be plausible, including its decision to assign only 3% of the fault to Nikola for failing to prevent Milton from misleading investors.

The case against Milton stemmed from a series of false statements he made regarding Nikola's technological capabilities. Prosecutors successfully argued that Milton had lied to investors about key aspects of the company's operations and products. These misrepresentations included claims that Nikola had built a pickup truck "from the ground up," when in fact it had not. Milton also falsely stated that the company had developed batteries it was actually purchasing from other manufacturers. Perhaps most egregiously, he claimed progress on a "Nikola One" semi-truck that he knew was non-functional.

These fraudulent statements led to Milton's conviction in October 2022 by a Manhattan jury on two counts of wire fraud and one count of securities fraud. The conviction and subsequent sentencing sent shockwaves through the electric vehicle industry and raised questions about the due diligence processes of investors in emerging technologies.

Marc Kasowitz, representing Nikola in the case, expressed satisfaction with the judge's decision. "We are gratified but not surprised at the decision, in light of Milton's pattern of false and misleading public statements," Kasowitz stated. "We look forward to collecting the award." This statement underscores Nikola's determination to recover the funds and move past the controversy surrounding its founder.

The ruling serves as a cautionary tale for the tech and automotive industries, particularly in the rapidly evolving electric vehicle sector. It highlights the severe consequences of overstating technological capabilities and misleading investors, even in an industry known for its ambitious projections and cutting-edge innovations.

As Nikola attempts to rebuild its reputation and establish itself as a credible player in the electric truck market, this ruling provides a measure of vindication and potential financial recovery. However, the company still faces significant challenges in distinguishing itself from the controversies surrounding its founder and proving its technological capabilities.

Milton, now 42 years old, remains free on bail as he appeals both his conviction and the December 2023 sentence. The outcome of this appeal could potentially alter the trajectory of both Milton's personal legal situation and Nikola's financial recovery efforts.

The case, officially recorded as Nikola Corp v Milton in the U.S. District Court, District of Arizona (No. 23-02635), will likely have far-reaching implications for corporate governance and accountability in the startup ecosystem. It underscores the importance of transparency and honesty in corporate communications, especially for companies operating at the forefront of technological innovation.

U.S. District Judge Diane Humetewa has ruled that Trevor Milton, the founder of electric truck maker Nikola, must pay the company USD 167.7 million for making false and misleading statements to the public.

U.S. District Judge Diane Humetewa has ruled that Trevor Milton, the founder of electric truck maker Nikola, must pay the company USD 167.7 million for making false and misleading statements to the public. This decision, handed down on Monday in Phoenix, Arizona, marks a crucial turning point in the ongoing saga surrounding the embattled entrepreneur and his former company. Milton, who was sentenced to four years in prison in December 2023 following his conviction on fraud charges, now faces this substantial financial penalty in addition to his criminal sentence. The ruling upholds a divided arbitration panel's November 2023 award in Nikola's favour, reinforcing the severity of Milton's actions and their impact on the company he founded. Judge Humetewa's decision hinges on the interpretation of a separation agreement that Milton signed upon resigning as Nikola's chief executive in September 2020. The judge determined that the arbitration panel acted within its authority when interpreting this agreement, thereby validating the financial award. The breakdown of the USD 167.7 million penalty is particularly noteworthy. Milton is required to pay USD 121.25 million, representing 97% of Nikola's USD 125 million fine resulting from a settlement with the U.S. Securities and Exchange Commission (SEC) in a civil fraud case. The remaining USD 46.5 million covers Nikola's legal fees and expenses incurred during the proceedings. Milton's legal team contested the award, arguing that it was excessive and amounted to "rough justice." They claimed that the arbitration panel had failed to consider the "relative fault" of other Nikola executives, directors, and employees in the matter. However, Judge Humetewa found the panel's analysis to be plausible, including its decision to assign only 3% of the fault to Nikola for failing to prevent Milton from misleading investors. The case against Milton stemmed from a series of false statements he made regarding Nikola's technological capabilities. Prosecutors successfully argued that Milton had lied to investors about key aspects of the company's operations and products. These misrepresentations included claims that Nikola had built a pickup truck "from the ground up," when in fact it had not. Milton also falsely stated that the company had developed batteries it was actually purchasing from other manufacturers. Perhaps most egregiously, he claimed progress on a "Nikola One" semi-truck that he knew was non-functional. These fraudulent statements led to Milton's conviction in October 2022 by a Manhattan jury on two counts of wire fraud and one count of securities fraud. The conviction and subsequent sentencing sent shockwaves through the electric vehicle industry and raised questions about the due diligence processes of investors in emerging technologies. Marc Kasowitz, representing Nikola in the case, expressed satisfaction with the judge's decision. "We are gratified but not surprised at the decision, in light of Milton's pattern of false and misleading public statements," Kasowitz stated. "We look forward to collecting the award." This statement underscores Nikola's determination to recover the funds and move past the controversy surrounding its founder. The ruling serves as a cautionary tale for the tech and automotive industries, particularly in the rapidly evolving electric vehicle sector. It highlights the severe consequences of overstating technological capabilities and misleading investors, even in an industry known for its ambitious projections and cutting-edge innovations. As Nikola attempts to rebuild its reputation and establish itself as a credible player in the electric truck market, this ruling provides a measure of vindication and potential financial recovery. However, the company still faces significant challenges in distinguishing itself from the controversies surrounding its founder and proving its technological capabilities. Milton, now 42 years old, remains free on bail as he appeals both his conviction and the December 2023 sentence. The outcome of this appeal could potentially alter the trajectory of both Milton's personal legal situation and Nikola's financial recovery efforts. The case, officially recorded as Nikola Corp v Milton in the U.S. District Court, District of Arizona (No. 23-02635), will likely have far-reaching implications for corporate governance and accountability in the startup ecosystem. It underscores the importance of transparency and honesty in corporate communications, especially for companies operating at the forefront of technological innovation.

Nikola founder Trevor Milton ordered to pay USD 167.7 million

Law has finally caught up with auto maker Nikola's founder Trevor Milton. He was sentenced to four years in jail on Monday for lying about the company's products. the 41-year-old will also pay a fine of 1 million dollars.

41-year-old Trevor Milton to pay a fine of $1 million

Law has finally caught up with auto maker Nikola's founder Trevor Milton. He was sentenced to four years in jail on Monday for lying about the company's products. The 41-year-old will also pay a fine of 1 million dollars.

Nikola founder Trevor Milton sentenced for four years | World News | WION

Trevor Milton, the founder, and former chief executive of&nbsp;Nikola&nbsp;Corp&nbsp;was freed on $100 million bail&nbsp;after pleading not guilty to charges alleging that he defrauded&nbsp;investors by lying to them about the electric- and hydrogen-powered truck maker.

In an indictment, prosecutors in New York charged the 39-year-old billionaire with two counts of securities fraud and one count of wire fraud over his statements from November 2019 to September 2020 about&nbsp;Nikola's products and technology.

Authorities said Milton relied on a public relations blitz of social media posts as well as TV and podcast interviews to drive up&nbsp;Nikola's stock price, become one of the world's 100 richest people and "elevate" his stature as an entrepreneur.

"Milton lied about nearly every aspect of the business," US&nbsp;Attorney Audrey Strauss in Manhattan said at a news conference. "Today's criminal charges against Milton are where the rubber meets the road."

The US&nbsp;Securities and Exchange Commission filed related civil charges against Milton.

Milton was taken into custody on Thursday, and was expected to appear in Manhattan federal court later in the day.

Nikola&nbsp;said in a statement it has cooperated with the government and is focused on delivering Tre battery-electric trucks this year. The company was not charged.

In afternoon trading,&nbsp;Nikola&nbsp;shares were down $1.17, or 8.2 per cent, to $13.02, after falling as low as $12.60.

The charges mark a steep downfall for Milton, who founded Phoenix-based&nbsp;Nikola&nbsp;in 2014 and was its CEO until June 2020, when it went public after merging with a special-purpose acquisition company, or SPAC.

He stepped down last September as&nbsp;Nikola's executive chairman, two weeks after short-seller Hindenburg Research labeled the company a "fraud" and said it made many misleading statements about its technology.

Prosecutors said Milton's improper statements included that&nbsp;Nikola&nbsp;had built an electric- and hydrogen-powered "Badger" pickup from the "ground up," developed batteries in-house that Milton knew it was purchasing elsewhere, and had early success in creating a "Nikola&nbsp;One" semi-truck he knew did not work.

Strauss said the closest the&nbsp;Nikola&nbsp;One ever came to driving was when company engineers rolled a prototype down a hill so it could be filmed for a commercial.

Prosecutors said that upon deciding to take&nbsp;Nikola&nbsp;public, Milton became preoccupied with keeping its stock price high.

The indictment said that on March 2, 2020, the day before&nbsp;Nikola&nbsp;revealed it would go public, Milton emailed a board member that "we need to make sure we are getting retail investors on our side. That is what prevents the stock short selling. This is super important to me."

According to the SEC, Milton targeted ordinary retail investors he called "Robinhood investors," portraying himself as a "different" type of CEO who would be "transparent" about his company, portraying it as a trailblazer.

"Corporate officers cannot say whatever they want on social media without regard for the federal securities laws," SEC enforcement chief Gurbir Grewal said at the news conference.

Prosecutors said Milton's&nbsp;Nikola&nbsp;stake was worth at least $8.5 billion soon after the announcements regarding the Badger.

Milton is still worth $1.2 billion, Forbes magazine said on Thursday.

Tesla Inc is among&nbsp;Nikola's rivals in the electric truck sector. Both companies' names derive from&nbsp;Nikola&nbsp;Tesla, an inventor whose work included electric power, and Tesla CEO Elon Musk is now among the world's richest people.

In 2018, Musk and Tesla each agreed to pay $20 million in civil fines to settle SEC charges over a Musk tweet.

(With inputs from agencies)

Trevor Milton, the founder, and former chief executive of Nikola Corp was freed on $100 million bail after pleading not guilty to charges alleging that he defrauded investors by lying to them about the electric- and hydrogen-powered truck maker.

Trevor Milton, the founder, and former chief executive of Nikola Corp was freed on $100 million bail after pleading not guilty to charges alleging that he defrauded investors by lying to them about the electric- and hydrogen-powered truck maker. In an indictment, prosecutors in New York charged the 39-year-old billionaire with two counts of securities fraud and one count of wire fraud over his statements from November 2019 to September 2020 about Nikola's products and technology. Authorities said Milton relied on a public relations blitz of social media posts as well as TV and podcast interviews to drive up Nikola's stock price, become one of the world's 100 richest people and "elevate" his stature as an entrepreneur. "Milton lied about nearly every aspect of the business," US Attorney Audrey Strauss in Manhattan said at a news conference. "Today's criminal charges against Milton are where the rubber meets the road." The US Securities and Exchange Commission filed related civil charges against Milton. Milton was taken into custody on Thursday, and was expected to appear in Manhattan federal court later in the day. Nikola said in a statement it has cooperated with the government and is focused on delivering Tre battery-electric trucks this year. The company was not charged. In afternoon trading, Nikola shares were down $1.17, or 8.2 per cent, to $13.02, after falling as low as $12.60. The charges mark a steep downfall for Milton, who founded Phoenix-based Nikola in 2014 and was its CEO until June 2020, when it went public after merging with a special-purpose acquisition company, or SPAC. He stepped down last September as Nikola's executive chairman, two weeks after short-seller Hindenburg Research labeled the company a "fraud" and said it made many misleading statements about its technology. Prosecutors said Milton's improper statements included that Nikola had built an electric- and hydrogen-powered "Badger" pickup from the "ground up," developed batteries in-house that Milton knew it was purchasing elsewhere, and had early success in creating a "Nikola One" semi-truck he knew did not work. Strauss said the closest the Nikola One ever came to driving was when company engineers rolled a prototype down a hill so it could be filmed for a commercial. Prosecutors said that upon deciding to take Nikola public, Milton became preoccupied with keeping its stock price high. The indictment said that on March 2, 2020, the day before Nikola revealed it would go public, Milton emailed a board member that "we need to make sure we are getting retail investors on our side. That is what prevents the stock short selling. This is super important to me." According to the SEC, Milton targeted ordinary retail investors he called "Robinhood investors," portraying himself as a "different" type of CEO who would be "transparent" about his company, portraying it as a trailblazer. "Corporate officers cannot say whatever they want on social media without regard for the federal securities laws," SEC enforcement chief Gurbir Grewal said at the news conference. Prosecutors said Milton's Nikola stake was worth at least $8.5 billion soon after the announcements regarding the Badger. Milton is still worth $1.2 billion, Forbes magazine said on Thursday. Tesla Inc is among Nikola's rivals in the electric truck sector. Both companies' names derive from Nikola Tesla, an inventor whose work included electric power, and Tesla CEO Elon Musk is now among the world's richest people. In 2018, Musk and Tesla each agreed to pay $20 million in civil fines to settle SEC charges over a Musk tweet. (With inputs from agencies)

Nikola founder Trevor Milton freed on $100 million bail after fraud arrest

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Nikola founder Trevor Milton ordered to pay USD 167.7 million

41-year-old Trevor Milton to pay a fine of $1 million

Nikola founder Trevor Milton sentenced for four years | World News | WION

Nikola founder Trevor Milton freed on $100 million bail after fraud arrest