Fraud trial begins for founder of automaker Nikola

Sep 12, 2022, 1:40 PM | Updated: Sep 13, 2022, 2:55 am

CORRECTS TO ENTERING THE COURTHOUSE INSTEAD OF LEAVING THE COURTHOUSE - Trevor Milton prepares to e...

CORRECTS TO ENTERING THE COURTHOUSE INSTEAD OF LEAVING THE COURTHOUSE - Trevor Milton prepares to enter the Thurgood Marshall United States Courthouse on Monday, Sept. 12, 2022, in New York. Milton, the founder and former executive chairman of Nikola Corp., is accused of lying about the electric truck startup’s vehicles. Milton was indicted in 2021 on charges of securities fraud and wire fraud. (AP Photo/Brittainy Newman)

(AP Photo/Brittainy Newman)

NEW YORK (AP) — Trevor Milton, the founder of the automaker Nikola Corp., went on trial Monday on charges that he whipped up an investor frenzy for the startup company with false claims about its ability to produce trucks that run on electricity or hydrogen fuel cells.

Nikola’s stock price crashed and many investors suffered heavy losses in 2020 after reports emerged questioning Milton’s rosy claims about the company’s ability to produce cutting-edge vehicles.

In one example, the company put out a video that appeared to show a prototype truck driving down a desert highway. Prosecutors said that in reality, the truck wasn’t operational and had been rolled down a hill for the commercial.

The company’s promotional campaign won over many smaller investors. Nikola shares reached a price of close to $66 in June of 2020, briefly giving the company a market valuation that exceeded some major, established automakers. The stock now trades at under $5.50 per share.

Milton, who lives in Oakley, Utah, was indicted last year on charges of securities fraud and wire fraud. Jury selection began Monday at a federal court in New York.

He pleaded not guilty, and has been free on $100 million bail.

Milton’s lawyers have said they intend to argue at trial that he had no intention of deceiving anyone about the company’s products or technology.

Milton started Nikola in 2015 and announced that its stock would be publicly listed in 2020. He resigned in September of that year after the company had signed a $2 billion agreement with General Motors but following a report making allegations of fraud.

At that time, Nikola said the report was filled with misleading statements and accusations.

The company paid $125 million last year to settle a civil case against it by the Securities and Exchange Commission. Nikola didn’t admit to any wrongdoing in making that agreement.

The company continues to operate from a headquarters in Arizona. It has begun delivering some vehicles to customers and says it has been ramping up toward a capacity of making thousands of trucks per year.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Gabby Petito's mother Nichole Schmidt, wipes a tear from her face during a news conference o...

Associated Press

Mother of man who killed Gabby Petito said in letter she would help son ‘dispose of a body’

The mother of the man who killed Gabby Petito told her son in an undated letter that she would “dispose of a body” if needed because she loved him so much, according to copies of the note shared publicly for the first time this week by attorneys for Petito's parents.

4 days ago

A member of the 3rd U.S. Infantry Regiment, also known as The Old Guard, places flags in front of e...

Associated Press

5 things to know about Memorial Day including its controversies

Memorial Day is supposed to be about mourning the nation’s fallen service members, but it’s come to anchor the unofficial start of summer and a long weekend of discounts on anything from mattresses to lawn mowers.

4 days ago

FILE - This artist sketch depicts the trial of Oath Keepers leader Stewart Rhodes, left, as he test...

Associated Press

Officers describe chaos, fear on Jan. 6 as judge weighs prison time for Oath Keepers’ Rhodes

Police officers who defended the U.S. Capitol on Jan. 6, 2021, and public servants who fled the mob's attack told a judge on Wednesday that they are still haunted by what they endured, as the judge prepares to hand down sentences in a landmark Capitol riot case.

5 days ago

Pride month merchandise is displayed at the front of a Target store in Hackensack, N.J., Wednesday,...

Associated Press

Target on the defensive after removing LGBTQ+-themed products

Target once distinguished itself as being boldly supportive of the LGBTQ+ community.

6 days ago

(Photo By Tom Williams/CQ Roll Call via Getty Images)...

Associated Press

Former Arizona television journalist announces bid for Schweikert’s US House seat

A former Phoenix television journalist announced her candidacy Wednesday for the congressional seat currently held by seven-term Republican Rep. David Schweikert.

6 days ago

Tortoise by Henry Davis earned an honorable mention in the "Adventures in Nature” student photo c...

Associated Press

When you adopt a desert tortoise, prepare for a surprisingly social and zippy pet

They’re not fluffy, they don’t play fetch and they certainly don’t roll over. But there is such a thing as a lap tortoise.

7 days ago

Sponsored Articles

...

DAY & NIGHT AIR CONDITIONING, HEATING AND PLUMBING

Here are the biggest tips to keep your AC bill low this summer

PHOENIX — In Arizona during the summer, having a working air conditioning unit is not just a pleasure, but a necessity. No one wants to walk from their sweltering car just to continue to be hot in their home. As the triple digits hit around the Valley and are here to stay, your AC bill […]

...

Desert Institute for Spine Care

Spinal fusion surgery has come a long way, despite misconceptions

As Dr. Justin Field of the Desert Institute for Spine Care explained, “we've come a long way over the last couple of decades.”

(Photo by Michael Matthey/picture alliance via Getty Images)...

Cox Communications

Valley Boys & Girls Club uses esports to help kids make healthy choices

KTAR’s Community Spotlight focuses on the Boys & Girls Club of the Valley and the work to incorporate esports into children's lives.

Fraud trial begins for founder of automaker Nikola