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Trevor Milton, former CEO of Nikola, has been ordered to pay $167.7 million to the company for making false and misleading statements. The ruling, delivered by U.S. District Judge Diane Humetewa, comes after Milton's conviction on securities and wire fraud charges in 2022.
Former Nikola CEO Found Guilty of Fraud, Ordered to Pay Millions for Misleading Investors
Trevor Milton, the former CEO of Nikola, will be required to pay $167.7 million to Nikola, the company he founded, in response to his false and misleading statements to the public. U.S. District Judge Diane Humetewa rendered the decision in Phoenix on September 9, per Teslarati.
In October 2022, jurors in Manhattan found Milton guilty of two counts of securities fraud and wire fraud. At the time, prosecutors contended that Milton had deceived investors regarding several of Nikola's projects, such as the Nikola One, a purported hydrogen semi-truck that was rolled down an incline to simulate motion, and the hydrogen/electric Badger pickup truck, which was never constructed.
Judge Humetewa maintained the November 2023 arbitration panel's decision favoring the electric vehicle manufacturer. The commission had acted within its authority in interpreting a separation agreement between Milton and Nikola that the former CEO signed when he stepped down from his chief executive post in September 2020, as Judge Humetewa stated in a Reuters report.
Milton Held Responsible for Majority of Nikola’s $125 Million Fine and $46.5 Million in Legal Fees
The commission determined that Milton was responsible for paying 97% of Nikola's $125 million fine, which was imposed to resolve a civil fraud case initiated by the U.S. Securities and Exchange Commission (SEC). The panel also observed that Milton was responsible for nearly $46.5 million in legal fees.
Milton has contended that Nikola's award was excessive. He also asserted that the award was "rough justice" because the council effectively disregarded Nikola's directors, executives, and employees' "relative fault." Nevertheless, Judge Humetewa defended the panel's analysis, which attributed a 3% error to Nikola for failing to prevent Milton from misleading investors.
Nikola's lawyer, Marc Kasowitz, stated that the electric truck maker was “gratified but not surprised” at the court’s decision considering the former CEO’s pattern of sharing false and misleading public statements. Kasowitz noted that Nikola is looking forward to getting its award from its former CEO. “We look forward to collecting the award,” the lawyer stated.
