Questions about the legitimacy of electric vehicle manufacturer Nikola Motor Company have been swirling for almost a year. Today, a federal grand jury decided there were enough questionable moves to charge Nikola founder Trevor Milton with fraud for lying about “all aspects” of the company. His motivation was to increase stock sales which had become the lifeblood of the company.

Nikola became all about the stock value

Investments were how Nikola stayed afloat. It had promised electric vehicle production for years with little to show. If you don’t produce anything, you can’t make money. So investments were how the company limped on. 

The US Attorney’s Office in Manhattan accused Milton of two counts of securities fraud. It says Milton lied about aspects of the company and also wire fraud. Then the SEC weighed in with civil securities fraud charges. 

“Milton told lies to generate popular demand for Nikola stock”

“This is a very straightforward case,” U.S. Attorney Audrey Strauss told reporters. “Milton told lies to generate popular demand for the stock, beginning at least in or about March 2020. When Nikola announced that its stock would become publicly listed, Milton became increasingly preoccupied with keeping the company’s stock price high.”

Prosecutors say Milton was increasingly focused on the company’s stock. They say he lied about its vehicles, technology, and demand. The prosecutors also say he used its public offering to scam amateur investors. Some of those investors have lost hundreds of thousands of dollars.  

“Milton’s scheme targeted individual, non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews,” says the indictment. 

Milton accumulated $1 billion from the company’s public offering

Milton has accumulated more than $1 billion since the company went public a year ago. At that time, its stock was riding high at $93.99 a share. Today, it has taken a dump showing only $12.02 a share. That’s over a 15-percent plunge just today.

The wording of these charges does not soft-peddle the accusations. With such strong words, the feds must have more than ample ammunition to back their claims. Milton would do well to turn himself in and work with prosecutors. 

The strange road traveled by Nikola found it valued in June 2020, at more than Ford Motor Company. Such is the state of the stock market today. At that point, Milton had $8.5 billion in stock. 

Is Milton’s freedom worth $1 billion to him?

The grand jury is asking that Milton “should forfeit all property traceable to the commission of said offenses.” That would pretty much flush all of Milton’s gains down the drain. One could ask, “Is Milton’s freedom worth $1 billion to him?”

Nikola has emphasized the charges are against Milton and not the company. The attorney for Milton, Brad Bondi, says Milton is “wrongfully accused following a faulty and incompetent investigation.” If you have been following the saga of this company it will get more interesting in the next weeks.