Judge rejects Nikola founder’s bid to dismiss or move U.S. criminal fraud case

Trevor Milton, founder and prone-CEO of Nikola Corp., exits the Manhattan Federal Courthouse following an look in New York Metropolis, U.S., July 29, 2021. REUTERS/Eduardo Munoz

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NEW YORK, Nov 15 (Reuters) – A U.S. resolve on Monday refused to push apart a federal indictment charging Nikola Corp’s (NKLA.O) billionaire founder Trevor Milton with defrauding investors concerning the electric- and hydrogen-powered truck maker’s skills.

U.S. District Inform Edgardo Ramos rejected Milton’s claim that he wouldn’t had been indicted in New York for securities fraud and wire fraud on legend of his alleged lies had been in Arizona and Utah, where he lives, and the case belonged there if the least bit.

The Manhattan-based resolve stated Milton, 39, is at likelihood of be tried in New York if he traded Nikola stock on the Nasdaq and communicated fraudulent statements to that disclose.

Ramos stated other elements also supported keeping the case in New York despite Milton’s want to care at home for his wife, who based on court papers has an autoimmune dysfunction and other “severe” health disorders.

Lawyers for Milton did not straight away reply to requests for comment. They fill got referred to as the indictment “legally heart-broken” and opinion to peep a dismissal on substantive grounds.

Nikola has not been accused of wrongdoing.

Authorities stated Milton ragged a blitz of social media posts, and TV and podcast interviews to force up Nikola’s stock price over merely a pair of year.

Prosecutors stated he wrongly claimed that Nikola had built an electric- and hydrogen-powered pickup from the “floor up,” developed batteries he knew it modified into buying in completely different places, and modified into making growth on a truck prototype he knew did not work.

Milton based Phoenix-based Nikola in 2014 and modified into chief executive till June 2020, when it went public after merging with a assorted-reason acquisition company (SPAC).

SPACs, a burgeoning market, are funding autos that permit sponsors snatch private companies public sooner than through preliminary public offerings, but which critics speak are inclined to conflicts of hobby and shoddy due diligence.

Nikola and other automobile startups fill ragged SPACs within the hope of commanding high market valuations, bask in Elon Musk’s Tesla Inc (TSLA.O).

Prosecutors are also investigating electric truck maker Lordstown Motors Corp (RIDE.O) about its SPAC and statements about automobile pre-orders.

The case is U.S. v Milton, U.S. District Court docket, Southern District of New York, No. 21-cr-00478.

Reporting by Jonathan Stempel in New York
Editing by Marguerita Choy

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