AP

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 - Crystal Baziel holds the Pan-African flag Monday, June 19, 2023, during Reedy Chapel A.M.E C...

Associated Press

The beginner’s guide to celebrating Juneteenth

For more than one-and-a-half centuries, the Juneteenth holiday has been sacred to many Black communities. It marks the day in 1865 enslaved people in Galveston, Texas found out they had been freed — after the end of the Civil War, and two years after President Abraham Lincoln’s Emancipation Proclamation. Since it was designated a federal […]

24 hours ago

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch ro...

Associated Press

Plane that did ‘Dutch roll’ on flight from Phoenix suffered structural damage, investigators say

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch roll” during a flight from Phoenix last month.

5 days ago

This photo provided by Randy Shannon shows Mooney Falls on the Havasupai reservation outside the vi...

Associated Press

Dozens report illness after trips to waterfalls near Grand Canyon

Dozens of hikers say they fell ill during trips to a popular Arizona tourist destination that features towering blue-green waterfalls deep in a gorge neighboring Grand Canyon National Park.

6 days ago

Mugshot of Rudy Giuliani, who was processed Monday, June 10, 2024, in the Arizona fake electors cas...

Associated Press

Rudy Giuliani posts $10K cash bond after being processed in Arizona fake electors case

Rudy Giuliani, a former New York City mayor and Donald Trump attorney, was processed Monday in the Arizona fake electors case.

9 days ago

FILE - White House former chief of staff Mark Meadows speaks with reporters at the White House, Wed...

Associated Press

Former Trump chief of staff Mark Meadows pleads not guilty in Arizona fake elector case

Former Donald Trump presidential chief of staff Mark Meadows and Trump 2020 Election Day operations director Michael Roman pleaded not guilty Friday in Phoenix to nine felony charges for their roles in an effort to overturn Trump's Arizona election loss to Joe Biden.

12 days ago

deadly heat wave last summer...

Associated Press

After a deadly heat wave last summer, metro Phoenix is changing tactics

Fresh memories of the deadly heat wave last summer have led Arizona authorities to launch new tactics ahead of summer 2024.

23 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

Midwestern University

Midwestern University Clinics: transforming health care in the valley

Midwestern University, long a fixture of comprehensive health care education in the West Valley, is also a recognized leader in community health care.

Fraud trial begins for founder of automaker Nikola