A federal grand jury has charged the founder and former chief executive of electric vehicle startup Nikola with securities fraud, according to an indictment unsealed Thursday.
The U.S. Attorney’s Office in Manhattan has charged the entrepreneur, Trevor Milton, with one count of wire fraud and two counts of securities fraud, including making false statements about the company, according to CNBC.
Milton, a 39-year-old billionaire, resigned in September as Nikola chairman.
The indictment alleges Milton misled investors about the technology for battery- and hydrogen-powered vehicles it had hoped to manufacture.
Prosecutors said Milton crafted a scheme to pump up Nikola stock for his own gain by lying about the company’s products, technology and future sales prospects. They accuse him of using Nikola’s deal to go public – via a special-purpose acquisition company – to target amateur retail investors, some of whom lost hundreds of thousands of dollars, CNBC also reports.
"Milton’s scheme targeted individual, non-professional investors … by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews," according to the 49-page indictment.
The Securities and Exchange Commission also filed civil securities fraud charges against Milton on Thursday. The SEC asked the U.S. District Court of the Southern District of New York to permanently bar him from acting as an officer at a company that issues securities, to disgorge all ill-gotten gains and pay a fine, also according to CNBC.