CEO and founder of U.S. Nikola, Trevor Milton speaks during presentation of its new full-electric and hydrogen fuel-cell battery trucks in partnership with CNH Industrial, at an event in Turin, Italy December 2, 2019.
A federal grand jury charged Nikola founder Trevor Milton with three counts of criminal fraud for lying about "nearly all aspects of the business" to bolster stock sales of the electric vehicle start-up, according to an indictment unsealed Thursday.
The U.S. Attorney's Office in Manhattan accused the billionaire, who resigned as chairman in September, with two counts of securities fraud, including making false statements about the company, and wire fraud.
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.
Prosecutors said Milton built an intricate scheme designed to pump up the company's 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.
"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," according to the 49-page indictment.
Shares of Nikola were down by as much as 11% during early trading Thursday. The stock was trading at $12.85 a share, down by 7.4% as of midmorning.