NEW YORK, Sept 13 (Reuters) – Nikola Corp ( NKLA.O ) founder Trevor Milton became a billionaire by lying to investors about the low-emission vehicle company’s most important issues, a prosecutor told jurors as Milton’s fraud trial began on Tuesday. .
Prosecutors say Milton has been trying to mislead investors in the electric and hydrogen-powered truck maker since November 2019. He left the company in September 2020 after short seller Hindenburg Research called the company a “fraud.”
“He lied to innocent investors to buy the company’s stock,” US Attorney Nicholas Ross told the US District Court in New York. “On the backs of innocent investors who were taken in by his lies, he became a billionaire almost overnight.”
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Milton, 40, has pleaded not guilty to two counts of securities fraud and two counts of wire fraud.
Milton’s attorney, Mark Mucasey, on Tuesday called the case a “misleading lawsuit,” saying the entrepreneur wanted to express a vision for the future of trucking, not mislead investors.
Milton was impressed with the company’s plans and had good faith in their statements, Mukase said. A 2018 video taken by the lawyer, Alamam, said prosecutors later showed jurors appeared to show a truck rolling down a hill and apparently driving under its own power. Read more
“As far as I know, using special effects in car advertising is not a federal crime,” he said.
Prosecutors accused Milton of “doubling down” on earlier lies when the company went public. Nicola said the truck was moving under its own power, not “in motion”.
Milton’s attorneys also indicated they would challenge other senior executives at Nicola, including its general counsel, who approved Milton’s statements.
U.S. District Judge Edgardo Ramos oversaw the selection of 12 judges and four alternates in federal court in Manhattan on Monday.
Milton was charged last year. Prosecutor Nicola made false statements about progress in developing the technology.
Milton said on social media and podcasts that they are targeting retail investors who have flocked to the stock market during lockdowns related to the Covid-19 pandemic. Milton is accused of defrauding the seller of Utah Farms, a civil suit in which the former CEO says he accepted Nicola’s stock options as purchase price based on claims he made about the company.
Nicolas has spent more than $20 million on Milton’s legal defense so far, according to a public statement.
The company acquired VectoIQ Acquisition Corp. in June 2020. It went public in a proposed merger with Nicola that month, adding to its market value of $33 billion, but has since fallen below $3 billion.
Nicola agreed in December to pay $125 million to settle claims by the U.S. Securities and Exchange Commission that the company defrauded investors by misleading investors about its products, technical developments and business opportunities.
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Reporting by Jody Godoy and Luke Cohen in New York; Editing by Cynthia Osterman, Jonathan Otis and David Gregorio
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